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Dividend Policy and Return of Capital

Corporations often ask investment bankers - "What should we do with our dividend?" Theoretically, dividend policy does not change the value of the firm – implementing a dividend or adding to a dividend should not change the share price1. However outside of academia, it does for reasons including: Tax on Dividends versus

Accretion/Dilution Analysis – Part IV: Synergies and Source of Funds for M&A

Accretion/Dilution for M&A with Mixed Funding Sources Larger, transformative acquisitions tend to require a mix of debt and equity financing unless the acquirer had an underleveraged balance sheet beforehand and substantial cash reserves. As such, finding the breakeven for accretion requires additional calculation. The appropriate cost of acquisition is accordingly the blended

Accretion/Dilution Analysis – Part III: Using Debt for Acquisitions

The last two parts of our Accretion/Dilution series focused on all-stock transactions, which are excellent in forming a theoretical understanding of the dynamics at play. However, acquisitions often have a cash component to the consideration, either in-whole or in-part. How this cash is funded is usually through debt, although excess balance

Accretion/Dilution Analysis – Part I: EPS, Earnings Yield and All-Stock Transactions

Accretion/Dilution is an important concept in corporate finance which is associated with mergers & acquisitions (is a transaction accretive or dilutive post-merger) – however, accretion/dilution analysis is conducted whenever an analyst looks at pro-forma earnings (or cash flow for energy and mining companies) after the evaluation of various corporate actions

Purchasing a Company via Cash or Stock

In all our weekly M&A reports we cite the most important figure – the consideration. We have put together a quick summary to clarify the thinking around how acquirers structure the purchase and what the ramifications are for the acquirer (buyer) and the target (seller). This is useful as general corporate

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