This is a relatively standard technical question, which you can prepare for by making sure you have a sound financial knowledge foundation in place. These questions will be cut from a wide swath to ascertain if you have a comprehensive understanding.

“Tax will be adjusted in a WACC calculation to account for a company’s tax rate. A company’s tax bill will lower after interest payments because these payments are tax deductible.”

Like the question before, this question will seek to uncover your baseline knowledge of bedrock concepts of finance. Because of this, it will be helpful to walk through the components of a DCF, explaining the meaning and purpose behind different parts of the process.

Tying your answer into related financial concepts can also show an interviewer that you have a comfortable and dynamic handling of financial concepts and can conclude several reasoning steps.

“A discounted cash flow, or DCF, is a method to value an investment based upon how much money that investment will generate in the future. It can inform you as you make decisions about whether or not to acquire a company.

You can apply a WACC and future cash flows using your best estimations and work through a standard DCF equation. 

You can subtract your initial investment total and arrive at a net present value with your final answer. A positive NPV will usually suggest a project or investment worth pursuing.”

Though this may appear to be a quickly answered question, consider what an interviewer is looking for when asking this question. BMO is looking for people willing to assimilate into the company culture.

Sharing your personal goals and how BMO’s values are a part of these goals will satisfactorily show your worth as a driven individual with the collectivist attributes that a large organization looks for.

Additionally, you can use this question to show that you have a solid handle on the goal-setting and planning process. You have a clear goal and multiple plans that funnel into this goal and lead directly to its realization.

However, if you choose to answer the question, ensure that your goals and plans are genuine. If you don’t have 2-3 year career goals, it would be a great time to set them. Then, an interviewer will be able to see whether or not you have committed time to your future.

“My goal is to establish myself at BMO as a reliable worker and set myself up as a go-to for leading and completing projects. I intend to do this by adding value immediately as someone who takes on responsibility and volunteers to help with extra work.

I want to ensure that I am a multiplying force for good in every way, so whether I am showing a newer associate the ropes or working late into the night, I will extend myself as a reliable team member.”

Much of your work could be categorized as a challenging project quickly. An interviewer is looking for proof that you have completed work like this in the past without crumbling or becoming overwhelmed.

You can talk about an experience from whatever past endeavor you choose and then draw out the lessons you learned due to this experience. This will show that you accomplished something and now have learned skills that you are ready to apply elsewhere.

“When I was volunteering for XYZ, I had to step in and organize a conference with less than a day’s notice. This meant drawing up a program, putting together presentations, tracking down speakers on such short notice, and hosting the conference the next day.

With so little notice, I took no time for breaks before the conference was set to begin. Not only were all the necessities difficult to organize, but I also knew it would play out in front of over a hundred people, adding to the pressure.

What seemed impossible eventually became a reality as I buckled down and worked through the tasks I had outlined. I learned that I can generate an incredible amount when I put forth a concerted effort. I bring that same confidence into my projects today.”

This question allows you to talk about things you are passionate about and speak to your values. In addition, the interviewer would be interested to know that you spend your free time working towards wholesome ends.

“I belong to a volunteer organization that helps teach underprivileged kids. In my free time, I love helping the kids learn to read. It helps me keep perspective and feel like I have a higher purpose. ”

Like other questions already addressed, this question can be used to show your commitment to teamwork and highlight the leadership qualities you have exemplified. In addition, your example can highlight your propensity towards taking charge of situations.

“When I was part of a club in college, we wanted to raise money for a charity. The club leader had graduated, and I stepped in to lead and organize the efforts. By coordinating and working together, we reached our donation goal.”

Answering this question positively is obvious, but the part that could set you apart is explaining how you came to develop such solid time management skills. Again, an example can persuade the interviewer that your answer is genuine.

“They are great. I had to develop them when I was in school. I found that I had committed to so much between extra classes, clubs, and a social life that things would easily slide if I weren’t disciplined in my time management.

After years of that diligence, managing my time effectively has become my second nature. I find that I automatically slot tasks into hours of my day and get to work systematically accomplishing each job.”

BMO wants to know that they are bringing on skilled talent to balance human elements in an analytical field. Talk about the soft skills you exemplified in the situation that you detail.

“When I was trying to find funding for a start-up I worked for, I met with several potential investors and had to negotiate potential terms with them. Eventually, we found an investor that we could agree to terms with. It took plenty of listening and humility to find a solution.”

As you answer this question, your thought process will be the most important thing.

“If I were investing $1 million, I would put 90% of it into stocks and 10% into bonds. However, my risk tolerance is higher, and I am still pretty young, so I have a longer opportunity to see significant gains or make up for losses.”

You can then go more in-depth on specific companies you would like to invest in, along with certain index funds you have targeted. 

This technical question will assess your handling of financial concepts and critical thinking skills. Share your answer and some support for that choice.

“I would choose Return on Equity. However, we don’t have market information in this hypothetical situation, so any market-specific metric won’t be beneficial. We also don’t have insight into this company and their age, so other options will be less informative than ROE.”

Offering multiple answers to this question will show your interviewer that you have a sound comprehension of this financial principle. In addition, you can instill confidence in them that you can dissect the rate of return of an investment.

“To increase IRR, you can decrease the purchase price, raise the exit multiple, increase leverage, pay down debt, or increase EBITDA margins.”

Having a foundational understanding of financial principles is valuable by the number of technical questions asked in these interviews. Therefore, you would do well reviewing these concepts to talk with mastery.

“Working capital is the operating assets of a company. Its formula is

Current Assets - Current Liabilities

If working capital is negative, it doesn't necessarily mean it is bad, but you can shorten the operating cycle. You can also sell long-term assets for cash, issue equity, or increase sales.”

Like other behavioral questions, you want to detail an example while showing the interviewer that you have learned from the experience and are better.

“My first semester in college, I went into a final test unprepared and failed it. I had assumed that my intellect would help me pass easily, so I neglected to study thoroughly. I learned that I needed to stay humble and put in the work before walking into any situation.”