Skip to main content
All Questions

Company A buys company B with 100% debt. Company B has P/E of 10x and Company A has P/E of 15x. What interest rate is required on the debt to make the deal dilutive? Assume a 40% tax rate.

Unlock detailed company stats for this questionUpgrade

Community answers

No answers contributed by the community yet.

Related questions

Company A acquires company B. Company A has a P/E of 10, Company B has a P/E of 15x. Is the deal accretive or dilutive for company A?Company A has P/E of 10x, higher than Company B. Interest rate on debt is 5%. If Company A acquires Company B (both 40% tax rate), should Company A use debt or stock for most accretion?If a company has a P/E of 20x, an EV/EBITDA of 10x, Interest Expense of 20m, a 5% interest rate, depreciation of 20m and a market cap of 200m, what is the company's tax rate?

Related courses

Course

Product Management Interview Prep

Land your dream PM role at Anthropic, OpenAI, Meta, Apple, Google, and more. AI product sense rounds, vibe-coding prototypes, metrics questions, and the AI fluency interviewers now expect. Ace product strategy, product sense, analytical & execution, leadership & drive (behavioral), and technical PM interviews.

Course

System Design Interviews

Learn how to answer the latest system design questions across product, infrastructure, and AI domains. Features in-depth video examples, written breakdowns, and helpful reference patterns. Watch senior engineers and managers answer these questions in mock interview videos.