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
037Is the deal accretive or dilutive to the acquirer's EPS, and by how much?MizuhoInvestment Banking · San Francisco · 2026Bank of AmericaConsumer and Retail · London · 2026
Say this
The quick test is to compare the cost of the funding with the yield you are buying. If the target's earnings yield, the inverse of its P/E, exceeds the after-tax cost of the capital you use, the deal is accretive.
Then walk it
- For an all-stock deal the rule is simple: if the acquirer's P/E is higher than the target's, it is accretive. You are issuing expensive paper to buy cheap earnings.
- For cash, compare the target's earnings yield to the after-tax interest forgone on the cash. Cash earning 3 percent pre-tax, so about 2.25 percent after tax, against a target at 20 times P/E which is a 5 percent yield, is accretive.
- For debt, compare the target's earnings yield to the after-tax cost of the new debt. Debt at 7 percent pre-tax is 5.25 percent after tax, so a 5 percent yield target would be slightly dilutive on that funding alone.
- To quantify it, build the pro forma: combined net income including synergies and financing costs, divided by the new share count, against standalone EPS.
- Then the point that matters: accretion is not the same as value creation. You can buy a low-multiple, declining business, show accretion, and destroy value. The real test is whether the price is below the intrinsic value plus achievable synergies.
Where candidates lose it
Treating accretion as proof the deal is good. It is an EPS arithmetic result, not a value judgement. Saying so unprompted is exactly what the Bank of America version of this question was reaching for.
Expect next
- What drives the result, and how would you assess whether the deal creates value?
- So can an accretive deal destroy value?
- Where would the breakeven price be?
Reported by candidates at Mizuho (Investment Banking, San Francisco, 2026); Bank of America (Consumer and Retail, London, 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.