Problem
If Company A buys Company B with the following metrics, what is the pro forma share count?
Assume a 25% premium to Company B's stock price and Company A will use 60% Stock consideration.
|
|
Company A
|
Company B
|
|
Revenue
|
140
|
90
|
|
Net Income
|
45
|
25
|
|
Tax Rate
|
35.0%
|
30.0%
|
|
Shares Outstanding
|
120
|
80
|
|
Share Price
|
10.00
|
7.00
|
|
Estimated pre-tax income acquisition adjustments
|
|
9
|
Assuming pro forma share count of company B is 190, what is the Accretion or Dilution for Company A?