Accretion and Dilution Example in Portfolio Management
Can accretion/dilution be used to describe a transaction in a portfolio? I know an accretive acquisition is one where the pro forma (post-deal) Earnings per Share is greater than the acquirer’s (buyers) EPS before the deal is made. I work at a firm that invests in mortgages from originators. Could I say that an accretive acquisition at a mortgage fund would be when the aggregator's weighted average coupon rate of the mortgage portfolio is greater with the purchase of the mortgage then before the deal?
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