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. 027How does EV/EBITDA vary across industries, and where is it larger or smaller?ValuationIntermediatetechnicalTSTruist SecuritiesInvestment Banking · New York · 2026

   Say this

   High multiples go to businesses with durable growth, high returns on capital and low reinvestment needs, so software and branded consumer sit at the top. Low multiples go to cyclical, capital-hungry, low-growth businesses like steel, airlines and utilities.

   Then walk it

   1. Software trades high because incremental revenue costs almost nothing to serve, revenue is recurring, and CapEx is minimal. Twenty times and above is normal.
   2. Branded consumer and medical devices sit in the mid to high teens on pricing power and stable demand.
   3. Industrials and distribution sit around eight to twelve, reflecting moderate growth and real capital needs.
   4. Cyclicals and capital-intensive businesses sit low, often four to seven, because earnings are volatile and most of the EBITDA gets reinvested just to stand still.
   5. The unifying logic is that EV/EBITDA is a shorthand for growth, risk and reinvestment. High multiple means the market expects EBITDA to grow and to convert into cash. Steel fails both tests.

   Where candidates lose it

   Reciting sector multiples as trivia without the underlying driver. If you cannot explain why software earns twenty times and steel earns five, you have memorised a table. The answer is cash conversion and growth durability.

   Expect next

   • Which company would have a higher multiple, asset-heavy or asset-light?
   • What is an appropriate multiple for software?
   • A company in your sector trades at half the peer multiple. Why?

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

2. 028Which company would have a higher multiple, an asset-heavy company or an asset-light one?ValuationIntermediatetechnicalBarclaysInvestment Banking · London · 2026

   Say this

   Asset-light, normally, on EV/EBITDA. It converts more of its EBITDA into free cash flow because it does not have to spend heavily just to maintain the asset base, and it can grow without proportional capital.

   Then walk it

   1. Asset-light means low maintenance CapEx, so a higher share of EBITDA reaches free cash flow. Buyers pay for cash, not for EBITDA.
   2. It also means higher return on invested capital and the ability to scale without a matching balance sheet, which supports a growth premium.
   3. The mechanical wrinkle worth flagging: asset-heavy companies have large D&A, which inflates EBITDA relative to EBIT. So their EV/EBITDA looks artificially low while their EV/EBIT looks more normal.
   4. That is why comparing the two on EV/EBITDA alone is misleading, and why I would pull EV/EBIT or EBITDA less CapEx as well.
   5. The exception: an asset-heavy business with a genuinely protected asset, like a toll road or a regulated utility with a rate base, can command a high multiple precisely because the assets are the moat.

   Where candidates lose it

   Answering 'asset-light' with no mechanism. And missing the D&A point, which is the technically interesting half: part of the multiple gap is real economics and part is just an accounting artefact of EBITDA.

   Expect next

   • So how would you compare them fairly?
   • How would you value an airline that leases its fleet versus one that owns it?
   • Where does a toll road fit in your answer?

   Reported by candidates at Barclays (Investment Banking, London, 2026). Source: Wall Street Oasis.

3. 035How would you value a telco versus a software company?ValuationIntermediatetechnicalCSCredit SuisseInvestment Banking · Sydney · 2020

   Say this

   The telco is a capital-intensive, low-growth cash cow, so you value it on EV/EBITDA and EV/EBITDA less CapEx, and you care about the dividend. The software company is asset-light and growth-driven, so you value it on revenue multiples adjusted for growth and retention.

   Then walk it

   1. For the telco, EBITDA is large but so is CapEx on spectrum and network, so EV/EBITDA alone flatters it. EV/EBITDA less CapEx, or EV/EBIT, is the honest read.
   2. Telco value is also driven by regulation, spectrum holdings and subscriber metrics like ARPU and churn. A DCF works well because the cash flows are predictable.
   3. For the software company, current earnings are suppressed by growth spending, so EV/EBITDA is close to meaningless. EV/revenue against growth rate is the working metric.
   4. The quality tests for software are net revenue retention, gross margin and the rule of forty, growth plus margin. Those determine whether a revenue multiple is deserved.
   5. So both get a DCF, but the telco DCF is credible on near-term cash flows while the software DCF is almost entirely terminal value. That difference is the real answer: you trust the telco's forecast and you stress-test the software company's.

   Where candidates lose it

   Treating it as a list of two metric sets. The interviewer wants you to notice that the DCF is reliable for one and mostly assumption for the other. That structural insight is the answer.

   Expect next

   • What is the rule of forty?
   • What is the formula for net revenue retention, gross retention and churn?
   • Which would you rather own at today's multiples?

   Reported by candidates at Credit Suisse (Investment Banking, Sydney, 2020). Source: Wall Street Oasis.

4. 036Walk me through a merger model.M&AIntermediatetechnicalMSMorgan StanleyInvestment Banking · Hong Kong · 2025MSMorgan StanleyInvestment Banking · New York · 2026

   Say this

   Set the purchase price and the mix of cash, debt and stock. Combine the two income statements, layer in synergies and the financing effects, then compare the new pro forma EPS against what the acquirer would have earned alone.

   Then walk it

   1. Start with the offer price per share and the premium to the unaffected price. That gives you total consideration and the funding need.
   2. Choose the funding mix. Cash costs you forgone interest, new debt costs interest, new stock costs share count. Each has a different EPS effect.
   3. Add the two income statements together, then adjust: add synergies, subtract new interest expense, subtract forgone interest on cash used, and add incremental D&A from any asset write-up.
   4. Tax the adjustments at the marginal rate, then divide by the new share count including shares issued to the target.
   5. Compare pro forma EPS to standalone EPS. Higher is accretive, lower is dilutive. Then find the breakeven, usually the maximum price or the minimum synergies that keep it neutral.
   6. The output the client actually wants is the accretion-dilution sensitivity grid across price and synergy assumptions, plus the credit impact on pro forma leverage.

   Where candidates lose it

   Forgetting the forgone interest on cash. Cash is not free: using it costs you the interest you were earning. Candidates also skip the incremental D&A from purchase accounting, which quietly makes a deal look better than it is.

   Expect next

   • Is this deal accretive or dilutive, and by how much?
   • What is the rule of thumb for accretion using P/E?
   • How does an asset sale differ from a stock sale here?

   Reported by candidates at Morgan Stanley (Investment Banking, Hong Kong, 2025); Morgan Stanley (Investment Banking, New York, 2026). Source: Wall Street Oasis.

5. 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.

6. 038What is the difference between an asset sale and a stock sale?M&AIntermediatetechnicalMSMorgan StanleyInvestment Banking · Hong Kong · 2025

   Say this

   In an asset sale the buyer picks the assets and liabilities it wants and gets a stepped-up tax basis it can depreciate. In a stock sale the buyer takes the whole legal entity, warts and all, with the historical tax basis carried over.

   Then walk it

   1. Buyers prefer asset sales. You leave behind unwanted liabilities, including litigation and environmental exposure, and you get to write up the assets and depreciate them, which is a real cash tax benefit.
   2. Sellers prefer stock sales. One level of tax at capital gains rates, a clean exit, and no lingering obligations. In an asset sale a corporate seller can be taxed twice, at the entity and again on distribution.
   3. Asset sales are administratively painful. Every contract, licence and employee has to be assigned or novated, and some consents cannot be obtained.
   4. So price usually bridges the gap. A buyer will pay more for an asset deal because the tax step-up is worth something, and that premium is negotiated.
   5. The middle ground is a 338(h)(10) election in the US, where a stock sale is treated as an asset sale for tax purposes. That gets the buyer the step-up without unwinding every contract.

   Where candidates lose it

   Getting the preference backwards, or not knowing why the buyer cares. The step-up in basis is the whole economic point. If you cannot explain that the write-up creates future depreciation and therefore a cash tax shield, you have only memorised labels.

   Expect next

   • How do you quantify the value of the step-up?
   • What is a 338(h)(10) election?
   • How does purchase accounting change your merger model?

   Reported by candidates at Morgan Stanley (Investment Banking, Hong Kong, 2025). Source: Wall Street Oasis.

7. 041Who is typically willing to pay more for an acquisition, a financial sponsor or a strategic buyer?M&AIntermediatetechnicalHoulihan LokeyMergers and Acquisitions · Los Angeles · 2026

   Say this

   A strategic, normally, because it can capture synergies and does not need a fixed return on equity. A sponsor is constrained by its return hurdle and the debt markets, so it is valuing standalone cash flows only.

   Then walk it

   1. The strategic gets cost synergies, revenue synergies and sometimes a strategic premium for defending a market position. All of that expands the price it can justify.
   2. It also has a lower cost of capital and no fund life, so it can accept a longer payback.
   3. The sponsor has to hit roughly a 20 to 25 percent IRR in five years with debt it can actually raise. That caps the entry multiple mechanically.
   4. Where sponsors win anyway: a platform sponsor with an existing portfolio company in the sector effectively has synergies too, through a bolt-on. In that case the gap closes or reverses.
   5. And in a cheap credit market with high multiples, sponsors have repeatedly outbid strategics, because the leverage available made the maths work. So the rule holds on average and breaks often.

   Where candidates lose it

   Stating the rule with no mechanism and no exception. The interviewer wants the return-hurdle constraint named explicitly, and the bolt-on case is the answer that shows you follow live deals.

   Expect next

   • When does the sponsor win?
   • What return does a sponsor actually need?
   • How does the credit market change your answer?

   Reported by candidates at Houlihan Lokey (Mergers and Acquisitions, Los Angeles, 2026). Source: Wall Street Oasis.

8. 043Walk me through a deal you have been following, and tell me how it changed the industry.Markets and dealsIntermediatetechnicalBarclaysInvestment Banking · New York · 2023EvercoreInvestment Banking · Menlo Park · 2025Moelis & CompanyInvestment Banking · London · 2026WBWilliam BlairInvestment Banking · Atlanta · 2026

   Say this

   Pick one deal, know it cold, and tell it as a story with a number in every sentence: who bought whom, for how much, at what multiple, funded how, and why it made strategic sense.

   Then walk it

   1. Open with the facts in one breath: acquirer, target, enterprise value, the multiple paid, the premium to the undisturbed price, and the funding mix.
   2. Then the strategic rationale in one sentence. What did the buyer get that it could not build, and what synergies did it guide to?
   3. Then your own view, which is the part that matters. Was the price defensible? I would say something like: at fourteen times EBITDA against a peer set at eleven, the buyer needed the full guided synergies to justify it, so the deal is really a bet on integration.
   4. Then the industry effect: did it trigger consolidation, did it force a competitor response, did it change how the sector is valued?
   5. Pick a deal in the group you are interviewing with, and pick one where you have an actual opinion. A deal you can only describe is worse than a smaller deal you can argue about.

   Where candidates lose it

   Choosing the biggest headline deal and only reciting what the press release said. If you cannot say what multiple was paid and whether you think it was too much, you have not followed the deal, you have read about it.

   Expect next

   • Was the price too high?
   • If you were the buyer, what would you have worried about in diligence?
   • Who else could have bought it?

   Reported by candidates at Barclays (Investment Banking, New York, 2023); Evercore (Investment Banking, Menlo Park, 2025); Moelis & Company (Investment Banking, London, 2026); William Blair (Investment Banking, Atlanta, 2026). Source: Wall Street Oasis.

9. 044If you were the buyer, what would you consider before doing this acquisition?M&AIntermediatetechnicalEvercoreInvestment Banking · Menlo Park · 2025

   Say this

   Four things in order: is the target worth what I am paying on a standalone basis, what synergies are genuinely achievable, can I fund it without breaking my own credit profile, and can I actually integrate it.

   Then walk it

   1. Standalone value first. Run the DCF and comps on the target alone, ignoring any synergy, so you know what you are paying for the business as it is.
   2. Then synergies, split into cost and revenue, with a probability attached. Cost synergies are largely deliverable; revenue synergies are usually aspirational and I would haircut them heavily.
   3. Then funding and credit. What does pro forma leverage look like, does it breach covenants, does it cost the acquirer its rating? A deal that triggers a downgrade can be value-destructive even if it is accretive.
   4. Then integration and diligence risk: customer concentration, key-person dependency, systems compatibility, culture, and anything in the quality-of-earnings work that suggests the EBITDA is not real.
   5. And the deal-breaker screen: antitrust, foreign investment review, and change-of-control clauses in the target's major contracts. Those are the things that kill deals after you have paid the fees.

   Where candidates lose it

   Producing an unstructured list of worries. Structure is the point. Standalone value, then synergies, then financing, then integration, then closing risk. Give the frame first, then populate it.

   Expect next

   • Which synergies would you actually put in the model?
   • How would you diligence the quality of earnings?
   • What would make you walk away?

   Reported by candidates at Evercore (Investment Banking, Menlo Park, 2025). Source: Wall Street Oasis.

10. 047How are current macroeconomic conditions affecting the M&A market?Markets and dealsIntermediatetechnicalDeutsche BankInvestment Banking · Boston · 2025Perella Weinberg PartnersInvestment Banking · Houston · 2025

    Say this

    Work the chain from rates to deal volume: the cost and availability of debt sets what sponsors can pay, valuation gaps between buyers and sellers set whether processes clear, and confidence in forecasts sets whether boards will commit at all.

    Then walk it

    1. Rates first. Financing cost sets the sponsor's maximum entry multiple directly, because the deal has to service the debt. Higher rates compress what leverage can support.
    2. Then the bid-ask spread. Sellers anchor on the multiple they could have got two years ago, buyers price off today's cost of capital. When that gap is wide, processes get pulled and volume falls.
    3. Then financing availability, which is separate from price. Private credit has taken a large share of leveraged lending from the banks, so deals can now get done even when the syndicated market is shut.
    4. Then confidence. Boards do not approve transformational deals when they cannot forecast next year. That is why uncertainty hurts volume more than the level of rates does.
    5. And the composition effect worth naming: in tougher markets you see more all-stock mergers, more minority and structured deals, more corporate carve-outs as companies raise cash, and more take-privates when public multiples fall below private marks.

    Where candidates lose it

    Answering with stale numbers or none at all. You do not need to be right about the exact policy rate, but you must know roughly where rates sit and one live example of a deal or a sector that reflects it. Update this the week of your interview.

    Expect next

    • What makes a good IPO environment?
    • What would you expect to happen to deal volume next year?
    • How has private credit changed leveraged finance?

    Reported by candidates at Deutsche Bank (Investment Banking, Boston, 2025); Perella Weinberg Partners (Investment Banking, Houston, 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.