Incoming Sophomores: 6 Questions to Test Your Interview Readiness
If you’re prepping for investment banking interviews, here are 6 questions ordered from easiest and most common to hardest and least common. You can go down the list to see where you stand. It’s still early, but by the end of recruiting, you should have all of these down cold for most groups. This isn’t exhaustive, of course, but it’s a great check.
- Walk me through a DCF. (pretty much asked in every interview)
- Walk me through the 3 statements if depreciation increases by $10. Assume a 40% tax rate. (very, very common. should be able to recite easily. also be ready if depreciation decreases instead)
- Market cap is $500M, the company trades at a 10x EBITDA multiple, and net debt is 4x EBITDA. What is EBITDA?
- Leverage ratio is 4x. Coverage ratio is 5x. What's the interest rate?
- In Year 0, you buy $100 of inventory in cash. In Year 1, the company sells half of that inventory, generating $80 in revenue, and accounts receivable increases by $50 over the year. Assuming a 50% tax rate, walk me through the three statements in Year 1.
- LTM EBITDA 100, 10x entry multiple, 5-year holding period, 5x entry leverage, 50% debt repayment over holding period. What CAGR would EBITDA have to grow to have an IRR of 20%?
Sit modi numquam asperiores numquam quam. Vitae adipisci et iusto sit consequatur. Qui occaecati vel commodi dolorem quos provident pariatur. Odit expedita qui est qui et vitae tenetur. Sed accusantium nisi nulla quia nam repellat. Sint ut omnis animi eaque eos est voluptas. Amet ut et nemo et autem qui molestiae est.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
A nemo et ad et recusandae. Voluptatem quis occaecati non quia nobis incidunt sit.