Duff and Phelps Case
I have an interview at D&P in a week or so for the valuation analyst position and heard that there was a group case study involved. Does anybody know what this case involves and what you should know going in? I don't really have much of a valuation background so any help would be appreciated.
Also what kind of technical q's could I expect at this superday? Easy accounting/finance stuff or more complicated topics?
Duff & Phelps likes to ask difficult technical questions in the one-on-one interviews.
The case is basically everything you should have learned or taught yourself technically (comps, DCF) and you are acting as the buy-side advisor, so you want to keep the valuations low. Don't build in synergies. Its possible you might even want to revise costs up for the first years to assume poor ability to integrate the operations.
Additionally, you should know how to come up with WACC to discount the amount, I.E. unlever and relever beta.
Thanks, it sounds like I'm gonna need to prep like crazy. Do you happen to have a few examples of what some questions may be? I only ask because my round 1 technicals were not bad (just walk through DCF and what happens with increase in investment in equipment) and the rest were fit.
It's essentially DO a DCF and DO a comps analysis as opposed to "walk me through a XXX" - those ARE the questions.
They are looking for good team work and someone who takes charge without being a dick as well. It's all about the group dynamic and a solid presentation.
BE AWARE OF YOUR TIME! You have 70 minutes to prep the presentation and 20 minutes to present.
Also, I had a hard effing technical question during my one-on-one, and it boils down to this: If Enterprise value = 1000 and the value of your debt = 1002, what is the value of equity? It CANNOT be negative, because you aren't going to pay someone to take your security. It is a non-negative positive number, you won't be able to come up with the number, but you can answer the question, you have to say that you would price the equity with the Black-Scholes model, and the value of the equity would be essentially a call option, if you expected the value of the equity to grow greater than the expected liability growth.
No, you do not need black-scholes and this answer has nothing to do options at all. All this means is that you have more cash on hand than debt, period. EV = market cap + debt - cash
Ah, yes, no you are correct. I'm sorry - I didn't stipulate I was referring to NET debt (as prompted by the interviewer, I am aware of the difference.) You're right, but no, you treat the company like a call option - that's what the interviewer told me, as I didn't get it.
Where did you have your interview?
Just had mine this past week
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