Dilution occurs when a merger or acquisition causes the acquirer's earnings per share (EPS) to decrease after the deal. It’s the opposite of accretion. If the result is negative, the deal is dilutive. What causes dilution? Overpaying (high purchase price) Issuing too much new equity Low/no synergies Target earnings < cost of capital
Learn Dilution with interactive examples and practice exercises in our Mergers and Acquisitions module.
This interactive learning module helps you understand Dilution through hands-on practice and real-world examples.