Debt shop modelling test

Hi everyone

Currently preparing interviews for credit focused shops.

On the modelling tests, how would you approach the following live test (3-4h): "Here is a name & some financials, you have the possibility to invest across the cap stack. Would you do so, in which instrument/price?"

The only way I see is to i) start from an assumption on your targeted returns (say 15%), ii) compute the NPVs of future CFs for that instrument at that rate iii) compute the implied price based on that NPV I have no idea however if the approach above is correct so any comments from more experienced pp would be more than welcome

Thanks

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