Relative P/E and Accretion Dilution

This question practices a core accretion dilution shortcut that interviewers expect candidates to know in mergers and acquisitions. It tests whether you understand how the buyer’s valuation relative to the target’s valuation affects the number of shares issued, the earnings added in the transaction, and the direction of the EPS impact. Candidates need to connect market multiples to pro forma share count and earnings contribution, because bankers often use this quick comparison before building a full model. Interviewers ask it to check both technical fluency and whether you can explain merger economics in a simple, intuitive way.