What is the relative P/E framework, and how do you use it for a quick A/D estimate?

The relative P/E framework is a shortcut for estimating whether a deal is accretive. Compare the acquirer's P/E or cost of financing with the acquisition P/E paid for the target. If the buyer funds the deal with a cheaper currency than the earnings yield acquired, it tends to be accretive. It is a shortcut, not a replacement for a full A/D model.