PJT Partners Interview Questions 2027: Merger Model & Accretion/Dilution & How to Answer

For PJT Partners interview questions on merger math, define then analyze: the exchange ratio is the number of acquirer shares issued per target share; a deal is accretive if pro forma EPS exceeds the acquirer's standalone EPS, dilutive if below. The quick test: if the target's earnings yield exceeds the acquirer's cost of the consideration, it's accretive. This modeling question is commonly reported by candidates.

What These Pjt Partners Interview Questions Assess

This question is commonly reported by candidates interviewing at PJT Partners for 2027 roles. It assesses merger-model fundamentals: interviewers want the exchange-ratio definition, the accretion/dilution mechanics, and the intuition for what drives the result — relative P/E multiples and financing mix.

How to Answer Pjt Partners Interview Questions Like This

Interviewers score technical questions on your process, not just the final answer. State your assumptions first, work through the steps out loud in order, and sanity-check your conclusion at the end.

• Define exchange ratio: acquirer shares issued per target share — it sets the ownership split and new share count.
• Define the test: build pro forma EPS (combined earnings ÷ combined shares, adjusted for deal effects) and compare to standalone EPS.
• Give the intuition: all-stock deals are accretive when the target's P/E is lower than the acquirer's — you're buying earnings cheaply.
• Cover financing effects: cash deals add interest expense (or lost interest income); stock deals add share count.
• Note adjustments: synergies, transaction fees, and fair-value write-ups all move pro forma EPS — mention them for completeness.

Example line: "The exchange ratio determines how many new shares the acquirer issues, which sets pro forma share count. I'd compute pro forma EPS including synergies and deal adjustments, then compare to standalone EPS — higher means accretive. As a rule of thumb, an all-stock deal accretes when the target's earnings yield exceeds the acquirer's."

Common Mistakes in Pjt Partners Interview Questions Answers

• Defining accretion as “share price goes up” — it's about EPS, not price.
• Forgetting financing adjustments in pro forma earnings.
• Not knowing the relative-P/E intuition.

Merger math is core advisory literacy — confusing accretion with price movement is a basic error. Lock in the EPS test and the P/E intuition.

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FAQ

Accretive means good, right?

Not necessarily — accretion is arithmetic; a deal can accrete yet destroy value if the price paid was too high.

How do synergies affect the analysis?

They raise pro forma earnings, making deals more accretive — but use only credible, achievable synergies.

What about cash deals?

Compare the target's earnings yield to the after-tax cost of debt (or lost interest) funding the deal.

Does the exchange ratio affect control?

Yes — it determines the target shareholders' pro forma ownership percentage, which matters for governance.

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