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Accretion / Dilution Logic (Intuition-First)

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Numeric AnswerhardAccretion Dilution

An acquirer has net income of $500m and 200m shares (EPS = $2.50). It buys a target with net income of $80m for $1,000m in an all-stock deal. Acquirer share price is $50 (so it issues new shares to fund $1,000m). Annual pre-tax synergies are $30m and annual pre-tax intangible amortization is $20m. Tax rate is 25%. Ignoring one-time costs, what is EPS accretion (%)?

Enter as percentage (e.g., 5.0 for 5.0%)

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