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
023Where is the premium baked in in precedent transactions?UBSInvestment Banking · New York · 2026
Say this
In the numerator. The transaction value is the price actually paid to take control, which already includes whatever premium the buyer offered over the unaffected share price, so the resulting multiple is a control multiple.
Then walk it
- You build the multiple as transaction enterprise value over the target's EBITDA at the time. The EV is based on the offer price, not the pre-deal trading price.
- So the premium is inside the numerator and therefore inside the multiple itself. You do not add a premium on top afterwards.
- That is exactly why precedent multiples run above trading multiples for the same sector.
- The measurement subtlety: you compute the premium against the unaffected price, typically one day and thirty days before the first leak or announcement, not against the price after the rumour has already moved the stock.
- And the practical caution: if the precedent included large buyer-specific synergies, that multiple overstates what a financial buyer would pay for your client.
Where candidates lose it
Applying a control premium on top of a precedent transaction multiple. That double-counts and it is a genuine analyst error, not just an interview slip. Say explicitly that the premium is already in the multiple.
Expect next
- Against what price do you measure the premium?
- Why do precedent multiples exceed trading multiples?
- How stale is too stale for a precedent?
Reported by candidates at UBS (Investment Banking, New York, 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.