Accretion - Study guides, Class notes & Summaries

If a company trades at a forward PE of 20.0x, and acquires a company trading at a forward PE of 13.0x. Assuming the deal is 100% stock-for-stock, and a 20% premium is being offered, will the deal be accretive in year 1? - ANSWER Yes: stock for stock deals where the acquirer's PE is higher than target's are always accretive. Don't get tricked - a 20% premium just brings the target's PE to 13 + (13 x 20%) = 15.6 PE, still below the acquirer's. Walk me through a simple M&A model. - ANSWER An M...

"A" and "B" bought a house as tenants in common. If "A" dies which of the following statements about ownership of the house is correct? A) It automatically becomes tenancy in severalty. B) It is divided, with B retaining their original interest and the balance going to A's estate. C) B holds fee simple ownership to A's share of the property D) B holds a life estate ownership to A's share of the property - CORRECT ANSWER-B) It is divided, with B retaining their original interest and the...

What makes up 99.8% of the solar system's mass? The sun Mercury, Venus, Earth and Mars are called what type of planets? Terrestrial Terrestrial planets are ________ in size and ______ in mass and have a _______ density of 3.9-5.5 g/cm3 Small; Low; High What terrestrial planet is the densest of them all. Earth Jupiter, Saturn, Uranus and Neptune are called what types of planets? Jovian Jovian planets are ______ is size, ______ in mass and have a _______ density of about 0.7-1.6 g/c...

Breaking into Wall Street 400 Guide (Accounting, DCF, LBO, Valuation, Merger Models (Accretion/Dilution), Enterprise/Equity Value) Questions With Complete Solutions

Exam review of Wall Street Prep's M&A Modeling course - key M&A concepts like accretion / dilution, pricing structures (exchange ratios/collars/”walk-away” rights), acquisition accounting, and the step-by-step allocation of purchase price. We will then transition to the role of the investment banker in M&A

EAPS 106 Exam 1 review Questions and answers, rated A+ What is the outermost layer of the earth and what is its relative thickness? Crust; 35 Km What is 2nd layer of the earth and what is its relative thickness Mantle; 2850 Km Brainpower Read More What is the third layer of the earth and what is its relative thickness? Outer core; 2270 Km What is the fourth layer of the earth and what is its relative thickness? Inner Core; 1216 Km How did the earth acquire its internal heat? Heat o...

1. Company A, with a P / E of 25x, acquires Company B for a purchase P / E multiple of 15x. Will the deal be accretive? - ANS You can't tell unless you know that it's a 100% Stock deal. If it is a 100% Stock deal, then it will be accretive because the Buyer's P / E is higher than the Seller's, indicating that the Buyer's Cost of Acquisition (1 / 25, or 4%) is less than the Seller's Yield (1 / 15, or 6.7%). 2. Walk me through the full math for the deal now. Assume that Company A ...

1. Company A, with a P / E of 25x, acquires Company B for a purchase P / E multiple of 15x. Will the deal be accretive? - ANSWER You can't tell unless you know that it's a 100% Stock deal. If it is a 100% Stock deal, then it will be accretive because the Buyer's P / E is higher than the Seller's, indicating that the Buyer's Cost of Acquisition (1 / 25, or 4%) is less than the Seller's Yield (1 / 15, or 6.7%). 2. Walk me through the full math for the deal now. Assume that Company ...

1. Company A, with a P / E of 25x, acquires Company B for a purchase P / E multiple of 15x. Will the deal be accretive? You can't tell unless you know that it's a 100% Stock deal. If it is a 100% Stock deal, then it will be accretive because the Buyer's P / E is higher than the Seller's, indicating that the Buyer's Cost of Acquisition (1 / 25, or 4%) is less than the Seller's Yield (1 / 15, or 6.7%). 2. Walk me through the full math for the deal now. Assume that Company A has 10 shares ...

What is the fate of the largest stars? A) To collapse into a white dwarf and outgas its outer layers. B) To collapse into a black hole and outgas its outer layers. C) To collapse into a white dwarf and explode as a supernova. D) To collapse into a black hole and explode as a supernova. - ️️D) To collapse into a black hole and explode as a supernova. Which is the correct sequence of the Solar Nebula Hypothesis? (Don't worry about the starting point, just the order, since this is a...