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Assuming SA?
Correct. SA positions - although feedback on FT probably would be fairly relevant as well...
They are pretty technical. But it depends on who you get.
bump
I would be interested in knowing this as well. Anyone have any insights on Citi? Either from personal experience or from what you've heard, all comments would be greatly appreciated
I had the 2nd round (final) since my resume was passed by an MD.
Very technical - 2 30min interviews with an Analyst and Associate- expect all your normal tech questions, DCF, multiples, random valutation questions, some LBO stuff, some bonds (caught me by surprise).
Overall if you prepare well you should be fine. I studied my corp fin class notes, vault guide and stuff like that. Definitly the most technical interview I had (compared to GS, UBS, JPM and Lazard).
Asked me about DCF and accretion/dilution (on my resume). Also asked about comps. Pretty standard stuff but the first time I got the accretion/dilution question.
Behavioral part was very standard and about fit. They started asking about my schedule towards the end of the interview (specifically if I had any other superdays on the next Friday).
Called me back the next morning for a superday.
Thanks for the feedback thus far.
I have heard two responses two the accretion dilution analysis. I have heard you can analyze EPS and that you can look at PE ratios. Is there anything else to this question that I should be aware of?
I'm familiar with the EPS method, not the P/E method. I would stick to the EPS method.
One thing to keep in mind with EPS: addbacks and purchase price allocation will effect the earnings (i.e. you may have more depreciation).
Could you explain the EPS method in detail? Thanks!
A merger can either be accretive or dilutive. A merger is accretive when the acquiring company's earnings per share will increase after the merger and vice versa. Say a shoe company, BIg Gun wants to acquire a fast growing competitor, Ubershoe. Also suppose that Big Gun's earnings are $10 million, that it has 1 million outstanding shares (making it have an EPS of $10), and that Ubershoe's earnings are 2 million. Whether the acquisition will be accretive or dilutive depends on the amount BIg Gun will pay for Ubershoe. Say that BIg Gun agrees to a stock swap in which it issues 500k shares which it will trade for all of Ubershoe's shares. The combined company will have 1.5 million shares and 12 million in earnings. The new EPS will thus be $8 per share, making it dilutive to Big Gun's earnings.
Now let's change the scenario, lets' say that BIg Gun agrees to issue 100,000 new shares of stock instead of 500,000. The combined company will have $12 mm in earnings and 1.1 million shares, or an EPS of $10.91. This deal is accretive.
Using P/E Ratios----
When a company with a higher price to earnings ratios (let's say Company 1 and it's PE ratio PE1) acquires a firm, (Company 2 and it's PE ratio is PE2) which has a lower PE ratio, it is an accretive merger.
So if PE1 > PE2 the merger is accretive. if PE1 PE2 the merger is dilutive. The reason for this is that the acquiring company will pay less per dollar of earnings to acquire the target.
Models_and_bottles: Would you be willing to explain how exactly earnings might be affected and what addbacks might occur?
Any one else have any information regarding the CMB's interview process? There seems to be a general agreement that it is going to be quite technical....
Ya..I had them for SA last year. Very technical. One VP even gave me a sheet of paper and made me do DCF right in front of him. It was my most technical interview. Also interviewed with all of the BBs.
Fantastic... An analyst I know got asked the question, " In a leveraged buyout, what would be the ideal amount of leverage to put on a company?
Any suggestions
look at comparable companies debt to equity ratios and take the median
thx u , timely response .
To get the best answer to that, I'd suggest asking the private equity forum
I would if it was from an interview for a PE firm. Any one with any suggestions?
To maximize returns, you'd obviously want the least amount of equity as possible, so I would've said something like making projections of how much debt they could feasibly handle based on their free cash flow. This would obviously vary from company to company.
do they ask hardcore technical questions even if you've never taken advanced finance courses/have experience in finance?
anyone has any experience? Plx share thanks!
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