Net income pro forma = Net income (Buyer) + Net income (Target) - Synergies post tax - Cost of debt
I have seen this formula in order to calculate the EPS pro forma but I don't get why the cost of debt is not post tax and the meaning behind if it's not a mistake.
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Should be post tax and reflect cost of incremental debt in case you raise debt (so other than existing target debt which you refi) and any delta in cost of refinanced debt.
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