Investment Banking interview preparation

Questions

100

Traced to a firm

100

Firms

46

Updated

September 2026

Asked at

All firmsTSTruist Securities10Rothschild & Co8Centerview Partners7CSCredit Suisse7HWHarris Williams6Houlihan Lokey6Lazard6Mizuho6Barclays5Citi5Deutsche Bank5Evercore5Moelis & Company5MSMorgan Stanley5Piper Sandler5RCRBC Capital Markets5Goldman Sachs4Nomura4TD Securities4Bank of America3GSGuggenheim Securities3J.P. Morgan3Jefferies3Moody's3Perella Weinberg Partners3WPWarburg Pincus3WBWilliam Blair3HSBC2Lincoln International2Scotiabank2TPTPG2UBS2Wells Fargo Securities2Advent International1Apollo Global Management1Bain Capital1Balyasny Asset Management1BLBlackRock1BPBNP Paribas1General Atlantic1Invesco1Morningstar1PIMCO1STSociété Générale1SSState Street1WMWellington Management1

Topic

All topicsAccounting14Valuation21M&A10Markets and deals10Capital markets3LBO8Leveraged finance3Restructuring2Credit3Debt capital markets2Capital structure2Case and estimation11Brainteasers6Fit5

Level

AnyCoreIntermediateHard

Type

AnyTechnicalCaseBrainteaserFitMarket view

1. 015Walk me through a DCF.ValuationCoretechnicalGoldman SachsInvestment Banking · New York · 2026Deutsche BankInvestment Banking · Honolulu · 2025BarclaysInvestment Banking · New York · 2025TSTruist SecuritiesCorporate Banking · Atlanta · 2025Houlihan LokeyDebt Capital Markets · Los Angeles · 2025CSCredit 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

   1. Build unlevered free cash flow: EBIT, taxed, plus D&A, less CapEx, less the change in working capital.
   2. Discount at WACC, because unlevered cash flow belongs to both debt and equity holders. Use mid-year convention if cash arrives through the year.
   3. 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.
   4. Sum the discounted cash flows and the discounted terminal value to get enterprise value.
   5. 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.
   6. 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.

2. 070What happens to EPS if a company issues debt to buy back shares?Capital structureIntermediatetechnicalDeutsche BankInvestment Banking · San Francisco · 2025

   Say this

   EPS usually rises, because the share count falls faster than net income does. It is accretive as long as the after-tax cost of the new debt is below the earnings yield of the stock you are buying.

   Then walk it

   1. Net income falls by the after-tax interest on the new debt. Share count falls by the shares repurchased. EPS is the ratio, so the direction depends on which falls proportionally more.
   2. The test: compare the after-tax cost of debt to the stock's earnings yield, which is the inverse of its P/E. Debt at 6 percent pre-tax is 4.5 percent after tax. A stock at 15 times P/E has a 6.7 percent earnings yield. Accretive.
   3. Flip it: a stock at 30 times P/E has a 3.3 percent earnings yield, below the 4.5 percent after-tax cost. Dilutive. Which is why expensive stocks should issue equity, not buy it back.
   4. Say the number to prove you can do it: $1,000 of debt at 6 percent costs $45 after tax at a 25 percent rate. If that buys 100 shares out of 1,000 and net income was $100, EPS goes from $0.10 to $55 over 900 shares, which is $0.061. Dilutive in that case, and the arithmetic tells you immediately.
   5. Then the value point: higher EPS does not mean more value. You have raised leverage, so the equity is riskier and the multiple should compress. Rearranging the capital structure does not create value on its own.

   Where candidates lose it

   Answering 'EPS goes up' with no condition. It depends entirely on the relationship between the cost of debt and the earnings yield. And stopping at EPS without noting that the multiple should fall as leverage rises.

   Expect next

   • So when is a buyback value-destructive?
   • What are the different ways to use excess cash?
   • How does this change the company's WACC?

   Reported by candidates at Deutsche Bank (Investment Banking, San Francisco, 2025). 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.