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
015Walk me through a DCF.Goldman SachsInvestment Banking · New York · 2026Deutsche BankInvestment Banking · Honolulu · 2025BarclaysInvestment Banking · New York · 2025Truist SecuritiesCorporate Banking · Atlanta · 2025Houlihan LokeyDebt Capital Markets · Los Angeles · 2025Credit 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
- Build unlevered free cash flow: EBIT, taxed, plus D&A, less CapEx, less the change in working capital.
- Discount at WACC, because unlevered cash flow belongs to both debt and equity holders. Use mid-year convention if cash arrives through the year.
- 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.
- Sum the discounted cash flows and the discounted terminal value to get enterprise value.
- 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.
- 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.
018What is WACC and how do you calculate it?CitiGeneralist · New York · 2026
Say this
It is the blended after-tax cost of a company's capital, weighted by the market value of each piece. Cost of equity times the equity weight, plus after-tax cost of debt times the debt weight.
Then walk it
- Cost of equity comes from CAPM: risk-free rate plus beta times the equity risk premium, with a size or country premium if the situation calls for it.
- Cost of debt is the yield the company would pay on new debt today, not the coupon on its old debt, and you multiply it by one minus the tax rate because interest is deductible.
- Weights use market values, not book. Market capitalisation for equity, and market value of debt, which for most investment grade paper is close enough to book.
- Use target capital structure rather than today's snapshot if today's is temporarily distorted.
- The honest caveat is beta. It is estimated from noisy historical data, so I would cross-check against a peer set rather than trusting one regression.
Where candidates lose it
Using the coupon on existing debt as the cost of debt, or using book equity in the weights. Both are common and both are wrong. WACC is forward-looking and market-based.
Expect next
- Why do you unlever and relever beta?
- Can debt ever be more expensive than equity?
- What happens to WACC as you add leverage?
Reported by candidates at Citi (Generalist, New York, 2026). Source: Wall Street Oasis.
021What are the main valuation methodologies, with the pros and cons of each?Centerview PartnersInvestment Banking · Menlo Park · 2026Piper SandlerInvestment Banking · New York · 2026InvescoAsset Management · New York · 2023
Say this
Three core ones: comparable companies, precedent transactions and DCF. Comps tell you what the market pays today, precedents tell you what buyers paid including control, and a DCF tells you what the cash flows are worth on your own assumptions.
Then walk it
- Trading comps: fast, market-based, easy to defend. But no two companies are truly comparable, and if the whole sector is mispriced your answer inherits that.
- Precedent transactions: captures the control premium and what strategic buyers actually paid. But deals are stale, each had its own circumstances, and disclosure is patchy.
- DCF: the only method grounded in the actual economics, and it forces you to state your assumptions. But it is enormously sensitive to WACC and terminal value, so it can be made to say almost anything.
- Situational ones sit alongside: LBO analysis for a floor value a sponsor would pay, sum of the parts for conglomerates, NAV for asset-heavy or real estate businesses, and dividend discount for banks.
- In practice you show all of them as a football field and argue for a range, because the overlap between methods is more persuasive than any single number.
Where candidates lose it
Listing the three and stopping when the question explicitly asked for pros and cons. Also, claiming DCF is 'the most accurate'. It is the most theoretically sound and the most easily manipulated, and saying both is what makes you sound credible.
Expect next
- Rank the four methodologies from highest to lowest value and explain why.
- Which would you weight most for a company like this?
- When would you not use a DCF at all?
Reported by candidates at Centerview Partners (Investment Banking, Menlo Park, 2026); Piper Sandler (Investment Banking, New York, 2026); Invesco (Asset Management, New York, 2023). Source: Wall Street Oasis.
025What is EV/EBITDA and when would you use it?William BlairInvestment Banking · Chicago · 2026
Say this
It values the whole enterprise against operating cash earnings before capital structure and accounting choices. You use it when you want to compare companies with different leverage, different tax positions or different depreciation policies.
Then walk it
- Enterprise value is capital-structure neutral, and EBITDA is pre-interest, so numerator and denominator match. Both belong to all capital providers.
- It strips out D&A, so it lets you compare an asset-heavy company with an asset-light one on operating performance.
- It is the default in M&A and leveraged finance, because a buyer is buying the enterprise and will put its own capital structure on it.
- Where it fails: it ignores capital intensity entirely. Two companies with the same EBITDA but very different CapEx are not worth the same, and EV/EBITDA cannot see that.
- So for capital-heavy businesses I would look at EV/EBIT or EV/EBITDA less CapEx alongside it. And for banks it is meaningless, because interest is revenue.
Where candidates lose it
Not being able to say when it breaks. Everyone knows the formula. The candidate who volunteers 'it is blind to CapEx, so I would pair it with EV/EBIT for a capital-intensive business' has answered the real question.
Expect next
- What happens to EV/EBITDA when EBITDA increases?
- How does EV/EBITDA vary across industries?
- Why would you never use it for a bank?
Reported by candidates at William Blair (Investment Banking, Chicago, 2026). Source: Wall Street Oasis.
032How do you get from enterprise value to equity value without using an equation?PIMCOFinancial Institutions Group · New York · 2023Truist SecuritiesCorporate Banking · Atlanta · 2025William BlairMergers and Acquisitions · London · 2026
Say this
Enterprise value is the price of the operating business itself. To get to what shareholders own, you pay off everyone with a prior claim, then add back anything the business owns that is not part of operations.
Then walk it
- Start with the value of the operating business, which is what enterprise value measures.
- Settle the lenders first, because they stand ahead of shareholders. Subtract debt.
- Add back cash, because cash is not part of the operating business and a buyer effectively gets it for free.
- Subtract the other prior claims: preferred stock, minority interest in consolidated subsidiaries, and funded pension shortfalls, since a buyer inherits those obligations.
- Add non-operating assets like stakes in unconsolidated affiliates or surplus real estate, because the operating cash flow never captured them.
- What is left is what the equity is worth. Divide by diluted shares and you have value per share.
Where candidates lose it
Reciting 'EV minus net debt' when the interviewer explicitly asked for no equation. They want the story of who gets paid in what order. Talk in terms of claims and seniority, not symbols.
Expect next
- How do you treat underfunded pensions in that bridge?
- What is the equity ticker and how do you calculate it?
- Why do you add back cash?
Reported by candidates at PIMCO (Financial Institutions Group, New York, 2023); Truist Securities (Corporate Banking, Atlanta, 2025); William Blair (Mergers and Acquisitions, 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.