Now that we have our financing in place, let's move on to computing the EPS acrretion dilution for the deal.

Now remember that equity financing requires the buyer to issue new shares. So the first thing here is to calculate the pro-forma share count.

Share the equity financing that we assumed was 41 billion.

Now we need to get the acquirers share price, and we can get that from Felix.

Here is the acquirers company page, and we can see in the middle that the acquirers share price is 278.51.

So let's type that in.

So that means that the number of new shares that will need to be issued in this deal are equal to the equity financing required divided by the share price for the acquirer, and that is 147.4 million. Now, what is the existing share account for the acquirer? Again, we'll get that from Felix, and the number here is 272.3.

If we add the existing diluted share count plus the new shares issued, we are going to get our pro-forma share count at 400, roughly 420 million shares. So now we can move on to our earnings starting with the acquirers earnings in the year 2027. So let's take the EPS from the very top of the template, and we can see that the EPS in 2027 is 18.1.

Now the acquirers diluted share count, it's 272.3. So we're doing this on a standalone basis.

So we can compute the net income of the acquirer as 18.1 times the number of shares. That gives us about 4.9 billion. Now let's try the same thing for the target.

The targets EPS in 2027, it's at the very top, and that would be 13.6.

Now we need the targets diluted share count. Now remember, this diluted share count should be at the target current share price. So we have to get that from Felix. Let's go back to Felix, change the ticker, and here we have the targets company page. And here in the middle you will see the diluted shares outstanding of 188.4.

So let's take that number and now we can compute the target's net income in 2027. By multiplying the EPS times the number of shares, that gives us about 2.5, 2.6 billion. So they combine net income before any incremental effects from the transaction itself will be the acquirers net income, plus the targets net income, and that's about $7.5 billion. So next we have to put through the net income all of the incremental effects or transaction effects, starting with synergies. So our estimated synergies for 2027, we have them up here at, let's see, it's down here at one, about 1 billion. Now we want after tax synergies, so we're going to take that and multiply it times one minus the tax rate, which is 21%.

There we go. So the 839 is our after tax synergies. Next, we want the after tax interest expense on the acquisition debt finance. So first we want to take the actual debt amount from the sources of funds. That's 24 billion. We're going to multiply that times the acquirers interest rate of 5.1, and then we multiply that times one minus the tax rate of 21%. Now this number must be negative because that is incremental interest. So I'm going to multiply times negative one.

That gives us about $960 million. Now we do have some interest savings because we are refinancing the existing targets debt. So let's compute those interest savings.

We're going to start by looking at the amount of debt in the targets balance sheet, and that is about 12 billion. We multiply that times the targets interest rate, which is 5%, and then we multiply that times one minus the tax rate at 21%.

And that gives us savings of 484. But we have one more thing and that is the interest lost or the interest income lost because we use some of our cash to acquire the target.

So let's go ahead and add the acquire's cash used in the deal, which is 746, and the targets existing cash. And that should be up here 517, and that is the cash lost in the deal. We're going to take that. We're going to multiply times the assumption of our cash rate at 3%, and then we're going to multiply that times one minus the tax rate. Again, this number will lower our combined net income, so I should make it negative. And that's 29.9. So now we can calculate the consolidated net income, which will be the sum of the combined net income, as well as all of the transaction effects below that gives us a consolidated net income of about 7.8 billion on this deal. So we are ready to compute the EPS accretion dilution number first, we need to get our pro-forma EPS, that requires that we take the pro-forma net income of 7.8 billion, and we divide it by our pro-forma share count up here, 419 million. And that gives us a pro-forma 2027 EPS of $18.60. So do we have accretion or dilution? Well, to figure that out, we gotta compare the pro-forma EPS to the acquirers EPS on the standalone basis. So we've got to take the 18.6 divided by the 18.1, which is the 2027 EPS for the acquirer on a standalone basis, minus one.

And that gives us a positive number, which means we have EPS accretion.