# Accretion/Dilution

*Corporate Finance & M&A — Finicade finance glossary*

An acquisition is accretive if it raises the buyer's earnings per share and dilutive if it lowers them. The analysis is the first thing a board asks and one of the least meaningful: a deal funded with cheap debt is accretive almost automatically, whether or not it creates value. Accretion measures financing arithmetic; value creation is whether the return exceeds the cost of capital.

**Also known as:** accretive acquisition, dilutive deal, EPS accretion

**Related terms:** [EPS (Earnings Per Share)](https://finicade.com/glossary/eps), [Mergers and Acquisitions (M&A)](https://finicade.com/glossary/mergers-and-acquisitions), [Synergies](https://finicade.com/glossary/synergies), [Diluted EPS](https://finicade.com/glossary/diluted-eps), [Dilution](https://finicade.com/glossary/dilution)

Source: https://finicade.com/glossary/accretion-dilution