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.

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Question bank

100 questions, mapped to the firms that asked them

Questions
100
Traced to a firm
100
Firms
46
Updated
September 2026
Asked at
All firmsTruist Securities10Rothschild & Co8Centerview Partners7Credit Suisse7Harris Williams6Houlihan Lokey6Lazard6Mizuho6Barclays5Citi5Deutsche Bank5Evercore5Moelis & Company5Morgan Stanley5Piper Sandler5RBC Capital Markets5Goldman Sachs4Nomura4TD Securities4Bank of America3Guggenheim Securities3J.P. Morgan3Jefferies3Moody's3Perella Weinberg Partners3Warburg Pincus3William Blair3HSBC2Lincoln International2Scotiabank2TPG2UBS2Wells Fargo Securities2Advent International1Apollo Global Management1Bain Capital1Balyasny Asset Management1BlackRock1BNP Paribas1General Atlantic1Invesco1Morningstar1PIMCO1Société Générale1State Street1Wellington Management1
Topic
All topicsAccounting14Valuation21M&A10Markets and deals10Capital markets3LBO8Leveraged finance3Restructuring2Credit3Debt capital markets2Capital structure2Case and estimation11Brainteasers6Fit5
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Type
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  1. 030Walk me through what happens to WACC when leverage rises, and tell me whether shareholder value actually changed.ValuationHardsuperdayCenterview PartnersInvestment Banking · New York · 2026

    Say this

    WACC falls at first, because you are swapping expensive equity for cheaper tax-deductible debt, then rises again as distress risk takes over. So there is a U shape. Whether shareholder value changed depends on whether the tax shield outweighs the distress cost.

    Then walk it

    1. Early leverage lowers WACC because debt is cheaper than equity and interest is deductible. The tax shield is a genuine transfer of value from the government to the capital providers.
    2. But as leverage rises, equity gets riskier, so cost of equity climbs. Lenders also reprice, so cost of debt climbs. Eventually both swamp the tax benefit and WACC turns back up.
    3. In a world with no taxes and no bankruptcy costs, Modigliani-Miller says the value of the firm is unchanged and you have only reshuffled claims. That is the reference case.
    4. In the real world the tax shield adds value and financial distress subtracts it, so there is an optimum somewhere in the middle. That is the whole theory of capital structure.
    5. So the honest answer to the second half is: shareholder value changed, but not because WACC fell. It changed because of the tax shield net of distress and agency costs. Falling WACC is a symptom, not the cause.

    Where candidates lose it

    Saying 'WACC falls so value goes up, therefore infinite leverage is optimal'. The interviewer asked the second half specifically to catch that. You must separate the mechanical WACC effect from the economic source of value.

    Expect next

    • So what is the optimal capital structure?
    • Can debt ever be more expensive than equity?
    • Why does Modigliani-Miller not hold in practice?

    Reported by candidates at Centerview Partners (Investment Banking, 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.