Buyer is acquiring Target in an all cash deal, financed with debt.

Calculate EPS accretion / (dilution) from the transaction.

Assume diluted number of shares outstanding equals to diluted weighted average shares outstanding for both companies.

a) 10.14%

b) 10.54%

c) 23.73%

d) -12.78%

*Please provide explanation.

Buyer Target 36.77 Share price 90.05 Diluted number of shares outstanding 1530.5 Acquisition premium 951.9 41.2% EPS 7.2 2.70 Pretax cost of acquisition debt 4.2% Tax rate 30.0% Expected pre tax synergies 63.8