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.
009What is the difference between levered and unlevered free cash flow?Credit SuisseData Modeling · Chicago · 2023
Say this
Unlevered free cash flow is before interest and debt movements, so it belongs to everyone who funded the business. Levered free cash flow is after interest and mandatory debt repayment, so it belongs only to equity holders.
Then walk it
- Unlevered starts at EBIT, taxes EBIT, and ignores the capital structure entirely.
- Levered starts effectively at net income, so interest and its tax shield are already inside it, and you then subtract debt amortisation.
- Unlevered gets discounted at WACC and gives you enterprise value. Levered gets discounted at cost of equity and gives you equity value directly.
- The reason the market defaults to unlevered is comparability. Two companies with identical operations but different leverage should show the same unlevered cash flow.
- Levered is what a sponsor actually cares about in an LBO, because that is the cash that services and pays down the debt.
Where candidates lose it
Discounting unlevered cash flow at cost of equity, or levered at WACC. That mismatch is the single most common valuation error in interviews and it invalidates the whole answer.
Expect next
- So which do you get to, enterprise value or equity value?
- Why does the market default to unlevered?
- When would you actually build a levered DCF?
Reported by candidates at Credit Suisse (Data Modeling, Chicago, 2023). Source: Wall Street Oasis.
012Do a DuPont analysis for a hospital business.Credit SuisseInvestment Banking · Mumbai · 2020
Say this
DuPont splits return on equity into net margin, asset turnover and leverage. For a hospital the story is almost always thin margins, heavy assets and therefore low turnover, with leverage doing a lot of the work on ROE.
Then walk it
- ROE equals net margin times asset turnover times the equity multiplier. Three levers, and each one tells a different operating story.
- Net margin for a hospital is driven by payer mix and case mix. Private-pay and high-acuity surgical work carry far better margin than government-scheme volume.
- Asset turnover is structurally low, because you have bought land, a building and imaging equipment. The operating metric behind it is occupancy and average revenue per occupied bed.
- That heavy asset base is why leverage matters so much. Hospitals fund expansion with debt, so the equity multiplier is doing real work in the ROE.
- The banker's conclusion: a hospital chain improves ROE mainly by filling existing beds and shifting case mix, not by cutting costs. Incremental occupancy has almost no marginal cost.
Where candidates lose it
Reciting the DuPont formula and stopping. The question names a hospital on purpose. If you cannot say what drives each of the three terms for that specific business, you have shown formula recall and nothing else.
Expect next
- Which of the three levers would you push first?
- What metrics would you ask the CFO for?
- How would this look different for a diagnostics chain?
Reported by candidates at Credit Suisse (Investment Banking, Mumbai, 2020). 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.
035How would you value a telco versus a software company?Credit SuisseInvestment Banking · Sydney · 2020
Say this
The telco is a capital-intensive, low-growth cash cow, so you value it on EV/EBITDA and EV/EBITDA less CapEx, and you care about the dividend. The software company is asset-light and growth-driven, so you value it on revenue multiples adjusted for growth and retention.
Then walk it
- For the telco, EBITDA is large but so is CapEx on spectrum and network, so EV/EBITDA alone flatters it. EV/EBITDA less CapEx, or EV/EBIT, is the honest read.
- Telco value is also driven by regulation, spectrum holdings and subscriber metrics like ARPU and churn. A DCF works well because the cash flows are predictable.
- For the software company, current earnings are suppressed by growth spending, so EV/EBITDA is close to meaningless. EV/revenue against growth rate is the working metric.
- The quality tests for software are net revenue retention, gross margin and the rule of forty, growth plus margin. Those determine whether a revenue multiple is deserved.
- So both get a DCF, but the telco DCF is credible on near-term cash flows while the software DCF is almost entirely terminal value. That difference is the real answer: you trust the telco's forecast and you stress-test the software company's.
Where candidates lose it
Treating it as a list of two metric sets. The interviewer wants you to notice that the DCF is reliable for one and mostly assumption for the other. That structural insight is the answer.
Expect next
- What is the rule of forty?
- What is the formula for net revenue retention, gross retention and churn?
- Which would you rather own at today's multiples?
Reported by candidates at Credit Suisse (Investment Banking, Sydney, 2020). Source: Wall Street Oasis.
048If a company is dual listed, which market should it raise in?Credit SuisseInvestment Banking · Mumbai · 2021
Say this
Wherever the cost of capital is lowest after all frictions, which in practice means wherever the natural investor base is. That is usually the market with deeper liquidity in your sector and better sector comparables.
Then walk it
- Start with valuation. If your sector trades at a higher multiple in one market because that market has the specialist investors and analysts, you raise there. Issuing where you are better understood is cheaper capital.
- Then liquidity. A deeper market absorbs a large primary issue with less price impact and a tighter discount to the last close.
- Then the frictions: listing and ongoing compliance cost, disclosure regime, index eligibility, and withholding tax treatment for the investors you are targeting.
- Currency and use of proceeds matter too. If you are funding capital expenditure in rupees, raising dollars creates an exposure you then have to hedge or live with.
- For an Indian issuer the concrete version of this is: domestic listing gives you index inclusion and a domestic mutual fund and retail bid, while an overseas raise can offer a better multiple for a technology story and access to larger institutional tickets. The answer follows the investor base, not national pride.
Where candidates lose it
Answering 'whichever has the higher share price'. Price levels across listings converge through arbitrage. The real question is where the marginal investor is and what the all-in cost of capital is after tax and compliance.
Expect next
- What are the differences between an India listing and a US listing?
- What makes a good IPO environment?
- How would fungibility between the two lines affect your answer?
Reported by candidates at Credit Suisse (Investment Banking, Mumbai, 2021). Source: Wall Street Oasis.
049What are the differences between listing in India and listing in the US?Credit SuisseInvestment Banking · Mumbai · 2021
Say this
Different regulators, different investor mix and different tolerance for loss-making growth. India is SEBI-governed with a large retail and domestic institutional bid; the US is SEC-governed with deeper institutional capital and more appetite for unprofitable scale stories.
Then walk it
- Regulator and process: SEBI reviews the draft offer document and the timetable is fairly prescriptive, with mandated retail and anchor allocations. The US is a disclosure regime with SEC comment letters and far more flexibility on structure.
- Investor base: Indian books lean on domestic mutual funds, insurers and a genuine retail tranche. US books are dominated by large institutions, so fewer, bigger tickets and more reliance on the anchor process.
- Valuation of unprofitable companies: the US market has historically paid for growth without earnings more readily. India's market has become much more receptive to this than a decade ago, but the scrutiny of path-to-profitability is heavier.
- Compliance load: US listing brings Sarbanes-Oxley, quarterly reporting to SEC standards, class-action litigation risk and materially higher ongoing cost. India is cheaper to maintain.
- And structural points that decide real cases: index inclusion and the domestic flow that follows it, currency of proceeds, dual-class share structures which the US permits and India generally does not, and where your customers and comparables actually are.
Where candidates lose it
Reducing it to 'US gives higher valuations'. That was more true five years ago than now, and an interviewer in Mumbai will push back. Talk about investor base, share structure and compliance cost, which are the durable differences.
Expect next
- Where would you advise an Indian software company to list?
- Why do some Indian companies choose to list overseas?
- How does dual-class structure change your answer?
Reported by candidates at Credit Suisse (Investment Banking, Mumbai, 2021). 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.