What makes an acquisition accretive to the acquirer's earnings per share?
- A The target is acquired at a lower effective cost than the acquirer's own earnings yield
- B The target is larger
- C The deal is all cash
- D Synergies are ignored
Answer
The target is acquired at a lower effective cost than the acquirer's own earnings yield
Broadly, if the acquirer's P/E exceeds the target's, an all-stock deal is accretive before considering synergies and financing costs.





