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. 011What is the difference between a finance lease and an operating lease, and which one affects valuation?AccountingIntermediatetechnicalMizuhoInvestment Banking · New York · 2026

   Say this

   Under current standards both sit on the balance sheet as a right-of-use asset and a lease liability. The difference is the income statement: a finance lease splits into depreciation and interest, while an operating lease stays as a single operating expense.

   Then walk it

   1. Finance lease treats you as the economic owner. Depreciation sits in EBITDA, interest sits below it, so EBITDA is higher.
   2. Operating lease keeps the full rent inside operating expenses, so EBITDA is lower.
   3. That means two companies with identical economics can show very different EBITDA depending on classification. It directly distorts EV/EBITDA comps.
   4. For valuation, the practical answer is that you have to be consistent. Either capitalise leases for everyone and treat the lease liability as debt in the bridge, or treat rent as an operating cost for everyone.
   5. The mistake that actually costs money is adding the lease liability to net debt while also leaving rent in EBITDA. You have then charged the company twice.

   Where candidates lose it

   Answering with the pre-IFRS 16 world where operating leases were off balance sheet. That has not been true since 2019. Get the current treatment right, then make the comparability point.

   Expect next

   • So do you include the lease liability in net debt?
   • How would you compare an airline that leases its fleet with one that owns it?
   • Which industries does this distort most?

   Reported by candidates at Mizuho (Investment Banking, New York, 2026). Source: Wall Street Oasis.

2. 037Is the deal accretive or dilutive to the acquirer's EPS, and by how much?M&AIntermediatetechnicalMizuhoInvestment 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

   1. 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.
   2. 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.
   3. 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.
   4. To quantify it, build the pro forma: combined net income including synergies and financing costs, divided by the new share count, against standalone EPS.
   5. 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.