Investment Banking interview preparation
Every question below is either traced to a named firm from a public candidate report, or tagged at desk level when we could not trace it. Answers are written the way you would actually say them out loud — answer first, then the mechanism, then the limitation.
100 questions, mapped to the firms that asked them
- Questions
- 100
- Traced to a firm
- 100
- Firms
- 46
- Updated
- September 2026
002Tell me how $10 of depreciation flows through the three statements.Credit SuisseData Modeling · Chicago · 2023BarclaysInvestment Banking · New York · 2025MizuhoInvestment Banking · New York · 2026Houlihan LokeyDebt Capital Markets · Los Angeles · 2025
Say this
Assume a 25% tax rate. Pre-tax income falls by $10, taxes fall by $2.50, so net income falls by $7.50. Cash actually goes up by $2.50, because depreciation is non-cash and the only real effect is the tax saving.
Then walk it
- Income statement: $10 of depreciation hits EBIT, so pre-tax income is down $10 and net income is down $7.50 at a 25% rate.
- Cash flow statement: start from net income at minus $7.50, add back the $10 non-cash depreciation, so cash from operations is up $2.50.
- Balance sheet: cash is up $2.50, net PP&E is down $10, so assets are down $7.50 net. Retained earnings are down $7.50. It balances.
- The whole point is the depreciation tax shield. Ten dollars of a non-cash charge bought you two-fifty of real cash.
Where candidates lose it
Saying cash goes down. It does not. Depreciation is non-cash, so the only cash effect is the tax you no longer pay. State your tax rate before you start so the interviewer can follow your arithmetic, and say the words 'tax shield'.
Expect next
- Now do the same for $10 of CapEx instead.
- What if the company had no taxable income that year?
- How does this change if the depreciation is not tax-deductible in that jurisdiction?
Reported by candidates at Credit Suisse (Data Modeling, Chicago, 2023); Barclays (Investment Banking, New York, 2025); Mizuho (Investment Banking, New York, 2026); Houlihan Lokey (Debt Capital Markets, Los Angeles, 2025). Source: Wall Street Oasis.
015Walk me through a DCF.Goldman SachsInvestment Banking · New York · 2026Deutsche BankInvestment Banking · Honolulu · 2025BarclaysInvestment Banking · New York · 2025Truist SecuritiesCorporate Banking · Atlanta · 2025Houlihan LokeyDebt Capital Markets · Los Angeles · 2025Credit SuisseInvestment Banking · São Paulo · 2021
Say this
Project unlevered free cash flow for five to ten years, discount it at WACC, add a terminal value for everything beyond the forecast, sum to enterprise value, then bridge to equity value and divide by diluted shares.
Then walk it
- Build unlevered free cash flow: EBIT, taxed, plus D&A, less CapEx, less the change in working capital.
- Discount at WACC, because unlevered cash flow belongs to both debt and equity holders. Use mid-year convention if cash arrives through the year.
- Terminal value two ways: Gordon growth on the final year cash flow, or an exit multiple on terminal EBITDA. I would run both and check they agree.
- Sum the discounted cash flows and the discounted terminal value to get enterprise value.
- Bridge down: less net debt, less preferred, less minority interest, plus non-operating assets, to get equity value. Divide by diluted shares for value per share.
- Then say the honest part: terminal value is usually 60 to 80 percent of the total, so the answer is mostly a function of the growth rate and discount rate, and I would sensitise both.
Where candidates lose it
Delivering it as a memorised list with no acknowledgement that terminal value dominates. Every candidate can recite the steps. The one who volunteers that most of the value sits in an assumption, and offers to sensitise it, sounds like someone who has actually built one.
Expect next
- What are the main drivers or sensitivities in your DCF?
- What discount rate would you use and why?
- When is a DCF the wrong tool?
Reported by candidates at Goldman Sachs (Investment Banking, New York, 2026); Deutsche Bank (Investment Banking, Honolulu, 2025); Barclays (Investment Banking, New York, 2025); Truist Securities (Corporate Banking, Atlanta, 2025); Houlihan Lokey (Debt Capital Markets, Los Angeles, 2025); Credit Suisse (Investment Banking, São Paulo, 2021). Source: Wall Street Oasis.
028Which company would have a higher multiple, an asset-heavy company or an asset-light one?BarclaysInvestment Banking · London · 2026
Say this
Asset-light, normally, on EV/EBITDA. It converts more of its EBITDA into free cash flow because it does not have to spend heavily just to maintain the asset base, and it can grow without proportional capital.
Then walk it
- Asset-light means low maintenance CapEx, so a higher share of EBITDA reaches free cash flow. Buyers pay for cash, not for EBITDA.
- It also means higher return on invested capital and the ability to scale without a matching balance sheet, which supports a growth premium.
- The mechanical wrinkle worth flagging: asset-heavy companies have large D&A, which inflates EBITDA relative to EBIT. So their EV/EBITDA looks artificially low while their EV/EBIT looks more normal.
- That is why comparing the two on EV/EBITDA alone is misleading, and why I would pull EV/EBIT or EBITDA less CapEx as well.
- The exception: an asset-heavy business with a genuinely protected asset, like a toll road or a regulated utility with a rate base, can command a high multiple precisely because the assets are the moat.
Where candidates lose it
Answering 'asset-light' with no mechanism. And missing the D&A point, which is the technically interesting half: part of the multiple gap is real economics and part is just an accounting artefact of EBITDA.
Expect next
- So how would you compare them fairly?
- How would you value an airline that leases its fleet versus one that owns it?
- Where does a toll road fit in your answer?
Reported by candidates at Barclays (Investment Banking, London, 2026). Source: Wall Street Oasis.
033How do you treat underfunded pensions in the bridge from enterprise value to equity value?BarclaysInvestment Banking · London · 2025
Say this
Treat the net deficit as a debt-like item and subtract it in the bridge, but on an after-tax basis, because the contributions that eventually close the gap are usually tax-deductible.
Then walk it
- The deficit is the projected benefit obligation less the fair value of plan assets. That shortfall is a real claim on the business that sits ahead of shareholders.
- So subtract it from enterprise value alongside debt. A buyer inheriting the plan inherits the obligation to fund it.
- Tax-effect it. If future contributions are deductible, the economic cost is the deficit times one minus the tax rate, not the gross number.
- Do not also leave pension service cost inside EBITDA and then subtract the deficit, or you have charged for it twice. Pick a lane and be consistent across every company in the comp set.
- The reason this matters in practice: for old industrials the deficit can be a meaningful fraction of market capitalisation, and it moves with discount rates. A falling rate environment inflates the obligation and can quietly destroy equity value.
Where candidates lose it
Ignoring it entirely, or subtracting it gross with no tax adjustment. Also double-counting by leaving service cost in EBITDA. Consistency across the comp set is the part that separates a real answer from a memorised one.
Expect next
- What if the plan is overfunded?
- How does a change in discount rates affect the obligation?
- Which sectors does this matter most in?
Reported by candidates at Barclays (Investment Banking, London, 2025). Source: Wall Street Oasis.
Firm tags come from public, anonymous candidate reports on Wall Street Oasis: strong signal, not sworn testimony. Firms are named as the places a question was reported, not as partners of Fin Maverick. Answers are written for this page to show how to think out loud; they are not scripts to recite.