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.
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.
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.