Series 79 practice questionhardAdvanced Financial Analysis
When analyzing the accretion/dilution impact of a stock-for-stock merger, which pro forma figure is most relevant?
- ATarget’s standalone EPS
- BAcquirer’s pre-deal EBITDA
- CCombined company’s book value per share
- DPro forma earnings per share (EPS) after synergies and adjustments✓ Correct answer
Explanation
Why D — Pro forma earnings per share (EPS) after synergies and adjustments
Pro forma EPS after including synergies and deal adjustments determines if the deal is accretive or dilutive. Relying on standalone metrics omits the transaction’s real impact.
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