The situation
The acquirer earns ₹120 crore on 10 crore shares. The target adds ₹24 crore after tax and the deal creates ₹6 crore after-tax savings. The acquirer issues 3 crore shares.
Your task
Is pro forma EPS accretive or dilutive?
Reveal step-by-step solution
Set up the problem
Standalone EPS = ₹120 ÷ 10 = ₹12.
Work through the numbers
Combined EPS = (₹120 + ₹24 + ₹6) ÷ (10 + 3) ≈ ₹11.54.
Interpret the result
EPS falls about 3.85%. Evaluate price and economic value separately from EPS.
What to remember
Bridge combined earnings and shares independently. Use consistent after-tax adjustments.