Using the following information to determine which one of the statements below is true. The target is trading at a P/E of 12.0x. The acquirer is trading at a P/E of 10.0x. Pre tax cost of debt is 5%. Tax rate is 20%. Offer premium is 25%. Assume no synergies.

Select one:

a. The deal is accretive if using all debt financing and the deal is also accretive if using all equity financing

b. The deal is dilutive if using all debt financing and the deal is also dilutive using all equity financing

c. The deal is dilutive if using all equity financing but is accretive when using all debt financing

d. The deal is accretive if using all equity financing but is dilutive when using all debt financing