Accretion / Dilution Calculator

Does the deal increase (accretive) or reduce (dilutive) the buyer's earnings per share?

Buyer net income (₹ Cr)Buyer shares (Cr)Buyer share price (₹)Target net income (₹ Cr)Purchase price (equity) (₹ Cr)Paid in new shares (%)Paid with new debt (%)Rest is cash on handInterest on new debt (%)Interest lost on cash (%)Tax rate (%)Pre-tax synergies (₹ Cr)

Accretive

5.41%

Buyer EPS today

₹10.00

Pro-forma EPS

₹10.54

New shares issued

6.00 Cr

After-tax funding cost

₹70.2 Cr

Target earnings

150

Synergies (after tax)

37.5

Funding cost

-70.2

Formula

New shares = Price × stock % ÷ buyer share price
Pro-forma NI = Buyer NI + Target NI + Synergies×(1−t) − (debt interest + lost cash interest)×(1−t)
Pro-forma EPS = Pro-forma NI ÷ (shares + new shares)

How it works

Split the price into stock, debt and cash.
Add target earnings and synergies; subtract after-tax funding costs.
Compare pro-forma EPS with the buyer's standalone EPS.

Where it's used: Every merger model and board presentation; a staple IB interview question.

Educational tool only. Not investment advice, not a recommendation, and not a substitute for professional valuation work.