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
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.
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.