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
052How do you drive returns in an LBO?Centerview PartnersInvestment Banking · Menlo Park · 2025TPGInvestment Banking · New York · 2024
Say this
Three levers: pay down debt with the company's cash flow, grow EBITDA through revenue and margin, and exit at a higher multiple than you paid. The first two you control, the third you mostly do not.
Then walk it
- Deleveraging: every dollar of debt repaid transfers a dollar of enterprise value to the equity. At five times leverage this alone can double equity over five years with no growth at all.
- EBITDA growth: organic revenue growth, pricing, cost programmes, and bolt-on acquisitions. Bolt-ons are especially powerful because a small target bought at six times inside a platform valued at twelve times creates value on day one through multiple arbitrage.
- Multiple expansion: selling at a higher multiple, either because the market re-rated or because you made the asset more valuable, bigger, more diversified, faster-growing.
- A fourth, less discussed: the dividend recap. Refinancing to pull cash out early shortens the duration of the return and lifts IRR without any exit.
- The discipline point: a sponsor's investment committee wants to see the return work on deleveraging and EBITDA alone, with flat or lower exit multiples. Anything that only works on multiple expansion does not get approved.
Where candidates lose it
Naming only leverage. Leverage amplifies returns; it does not create them. And forgetting that IRR is time-sensitive, so the speed of the return matters as much as the size.
Expect next
- Which lever matters most?
- What would you do in the first hundred days?
- How does a dividend recap change the IRR?
Reported by candidates at Centerview Partners (Investment Banking, Menlo Park, 2025); TPG (Investment Banking, New York, 2024). Source: Wall Street Oasis.
056Which yields a greater return, an IRR of 25 percent over 5 years or an IRR of 30 percent over 3 years?Centerview PartnersGeneralist · New York · 2026
Say this
The 25 percent over five years returns more total money: about 3.05 times against about 2.2 times. But the 30 percent is the better rate of return, so the answer depends on whether you can redeploy the capital.
Then walk it
- 1.25 to the fifth is roughly 3.05 times. 1.3 cubed is roughly 2.2 times. So more absolute money from the longer hold.
- But IRR is an annualised rate, and 30 percent beats 25 percent per year of capital employed.
- The deciding question is reinvestment. If you can put that capital straight into another 30 percent deal for the remaining two years, the short hold wins comfortably: 2.2 times 1.69 is about 3.7 times.
- If the capital sits in cash for two years, the long hold wins.
- This is exactly why limited partners care about both IRR and multiple on invested capital, and why a fund with spectacular IRR from fast flips can return less cash than one with lower IRR and longer holds.
Where candidates lose it
Answering with only one of the two framings. The question is deliberately ambiguous, and the right move is to compute both, then name reinvestment risk as the thing that decides it.
Expect next
- So which would a limited partner prefer?
- Why do funds report both IRR and MOIC?
- How would you game an IRR?
Reported by candidates at Centerview Partners (Generalist, New York, 2026). 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.