Series 79 practice questioneasyAdvanced Financial Analysis
A company's management team projects $12 million in pro forma synergies from a merger. Which analysis is most appropriate to determine if the deal will increase EPS for the acquirer?
- ACredit ratio analysis
- BAccretion/dilution analysis✓ Correct answer
- CSensitivity analysis
- DIndustry benchmarking
Explanation
Why B — Accretion/dilution analysis
Accretion/dilution analysis directly assesses how a transaction affects the acquiring company’s EPS. Other analyses do not measure post-deal earnings impact, and relying on them could miss crucial shareholder effects.
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