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Toughest Invest Banking Interview Questions #5

  1. What is the formula for enterprise value and how to calculate it?

  2. What is minority interest and why do we add in the enterprise value formula?

  3. Which will place a higher value on the company, equity comparables (trading comparables) or M&A comparables (transaction comparables ) and why?

  4. Suppose a company makes a $10,000 cash purchase of equipment on Dec 31 How does this impact the three statements?

  5. Explain to me how you would value a company and Which are the most used financial tools in this area?

  6. Tell me why cannot we use EV/Earnings or Price/EBITDA as valuation metrics?

  7. Tell me what factors can lead to the dilution of EPS in an acquisition?

  8. Tell me why we are subtracting cash in the enterprise value formula?

  9. Where do you see yourself after 5 years?

  10. Tell me if you have had to make a tough decision. How did you deal with this?

  11. Name a time you have been entrepreneurial. What did you learn from this?

  12. Tell me what is a common ratio used in project finance and how do you calculate it?

  13. Why is the DSCR (debt-service coverage ratio) used and what range do you expect it to be in?

  14. What is the credit rating for a high-yield bond?

  15. Why do we use a project finance structure as opposed to corporate finance?

  16. What is the delta of an option when it is at the money?

  17. Explain to me what will happen to the price of the option if there is an increase in interest rates?

  18. What is the price of an option if the volatility tends towards infinity And what if the expiry date tends towards infinity?

  19. How would you value a company?

  20. Tell me about some time when you have had to overcome adversity?

  21. How far do you see yourself going in the investment bank?

  22. What are the price options?

  23. If our client wants to invest $100 Million, how will you invest and what will your strategy be ?

  24. When did you see an entrepreneurial spirit?

  25. What are your current views on the Indian economy for investing?

  26. Tell me what is the hardest part in your life?

  27. Name three ways you value a company and the benefits and drawbacks of each?

  28. How do you calculate WACC? What do you use for the cost of debt and What do you use for the risk-free rate and what is that level today?

  29. Why do companies merge?

  30. Why would a company go public?

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