Hi all, I recently had an interview with EY Leads in Dubai. I am posting the interview qs asked here to help other candidates and even get my own doubts cleared on the Qs.
Questions asked were:
- While you calculate the DCF - US treasury rates are used - which one 20 yrs vs 10 yrs should be taken and why?
- FCFE or FCFF - debt - which is used and when? I am aware if FCFE is negative, you use FCFE over FCFF. There is some leverage arguments (unstable history of debt) - if some one can explain in detail for better understanding. 3.How do you compute cost of debt?
- When you have operation overseas - say upto 70% would you still add Country specific inflation to the discount rate? 5.How does the bank compute the interest rates?
- Capital structure weights used to compute WACC - Which weights are used? - Generally market weights are used. Practically, how are market weights arrived at and if no market weights are available - what weights would you use?
Guys having exposure these situations while valuation of a private company - please reply.
I'd love an answer to those as well
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