Investment Banking Interview Questions #3

Question Asked In Investment Banking Interview Questions

  1. How you will use your skill and experience apply to this job?

  2. Tell me the main causes the expansion and contraction of EV/EBITDA multiples?

  3. If depreciation boes down by $5000, how does this effect the financial statements of a company

  4. Where does minority interest go on the financials statements ?

  5. Describe how a discounted cash flow model is relaible or not.

  6. Walk me through an LBO?

  7. How would a PE firm value a company?

  8. What are your view on the value of gold?

  9. what is TLC, derivatives?

  10. What is the blackscholes model ?

  11. What does beta tell us about systematic risk?

  12. What Is DTA/DTL creation under various scenarios and Borrowing cost adjustments.

  13. Could you explain the concept of present value and how it relates to company valuations?

  14. Tell me about equity value and how is it calculated?

  15. How to calculate equity value from EV (Enterprise Value)?

  16. Could a company have a negative net debt balance?

  17. Is there possible enterprise value of a company turn negative?

  18. If a company raises $150 million in additional debt, how would its enterprise value change?

  19. What are the two main approaches of valuation?

  20. What are the most common valuation methods used in financial modelling ?

  21. What is the main difference between the unlevered DCF and the levered DCF?

  22. What is equity risk premium used in the CAPM formula.

  23. Explain the concept of beta (β).

  24. What are the benefits of the industry beta approach?

  25. How is the terminal value calculated?

  26. What is the purpose of using a mid-year convention in a DCF model?

  27. What are the purpose behind of using multiples in valuation?

  28. Which multiples are the most popular in valuation?

  29. What is Peg ratio and how to calculate?

  30. Two identical companies with different leverage ratios trade at different P/E multiples? Why?

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