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. 049What are the differences between listing in India and listing in the US?Capital marketsIntermediatetechnicalCSCredit SuisseInvestment Banking · Mumbai · 2021

   Say this

   Different regulators, different investor mix and different tolerance for loss-making growth. India is SEBI-governed with a large retail and domestic institutional bid; the US is SEC-governed with deeper institutional capital and more appetite for unprofitable scale stories.

   Then walk it

   1. Regulator and process: SEBI reviews the draft offer document and the timetable is fairly prescriptive, with mandated retail and anchor allocations. The US is a disclosure regime with SEC comment letters and far more flexibility on structure.
   2. Investor base: Indian books lean on domestic mutual funds, insurers and a genuine retail tranche. US books are dominated by large institutions, so fewer, bigger tickets and more reliance on the anchor process.
   3. Valuation of unprofitable companies: the US market has historically paid for growth without earnings more readily. India's market has become much more receptive to this than a decade ago, but the scrutiny of path-to-profitability is heavier.
   4. Compliance load: US listing brings Sarbanes-Oxley, quarterly reporting to SEC standards, class-action litigation risk and materially higher ongoing cost. India is cheaper to maintain.
   5. And structural points that decide real cases: index inclusion and the domestic flow that follows it, currency of proceeds, dual-class share structures which the US permits and India generally does not, and where your customers and comparables actually are.

   Where candidates lose it

   Reducing it to 'US gives higher valuations'. That was more true five years ago than now, and an interviewer in Mumbai will push back. Talk about investor base, share structure and compliance cost, which are the durable differences.

   Expect next

   • Where would you advise an Indian software company to list?
   • Why do some Indian companies choose to list overseas?
   • How does dual-class structure change your answer?

   Reported by candidates at Credit Suisse (Investment Banking, Mumbai, 2021). Source: Wall Street Oasis.

2. 050What makes a good IPO environment?Capital marketsIntermediatetechnicalMizuhoGeneralist · New York · 2026

   Say this

   Low volatility, rising or stable indices, recent IPOs trading above issue price, and sector multiples that let the issuer accept the price. The single best indicator is how the last three deals in the sector are trading.

   Then walk it

   1. Volatility is the gating factor. The VIX above roughly 25 effectively closes the window, because you cannot price a book when investors cannot price risk two weeks out.
   2. Aftermarket performance of recent deals matters more than the index level. If the last few IPOs broke issue, investors will not show up for the next one at any sensible price.
   3. Valuation levels have to be acceptable to the seller. A sponsor will not float an asset at a discount to its own carrying mark; it will wait or sell privately instead.
   4. You also need a receptive institutional bid with cash to deploy, and ideally a cornerstone or anchor investor willing to be named in the book.
   5. And a full pipeline is self-reinforcing. Windows tend to open and shut for everyone at once, which is why banks rush to price in the same three weeks.

   Where candidates lose it

   Listing 'good market conditions' without naming an observable. Volatility level and how the last three deals traded are the two things an ECM banker actually looks at. Name them specifically.

   Expect next

   • Why do IPOs get priced at a discount to fair value?
   • What is a greenshoe and why does it exist?
   • Would you advise a client to IPO or sell to a sponsor right now?

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

3. 051Walk me through an LBO.LBOIntermediatetechnicalTSTruist SecuritiesGeneralist · Charlotte · 2024TPTPGInvestment Banking · New York · 2024Advent InternationalTechnology, Media and Telecom · Palo Alto · 2020LazardInvestment Banking · New York · 2026

   Say this

   Buy a company using mostly debt, use its own cash flow to pay that debt down over five years, then sell it. The equity return comes from deleveraging, from growing EBITDA, and from any multiple expansion.

   Then walk it

   1. Set the entry: purchase price as a multiple of EBITDA, then a sources and uses table. Debt takes you as far as the credit market allows, say five times EBITDA, and the sponsor writes a cheque for the rest plus fees.
   2. Project the operating model for five years, then build the debt schedule: interest, mandatory amortisation, and a cash sweep that applies surplus cash to the debt.
   3. Free cash flow after interest pays down debt each year, so the equity slice grows even if enterprise value does not move at all. That is deleveraging.
   4. Exit at an assumed multiple on final-year EBITDA, subtract the remaining debt, and you have exit equity value.
   5. Compute IRR and money multiple against the initial cheque. Then attribute the return across the three drivers: debt paydown, EBITDA growth and multiple change. A sponsor will always ask which one is carrying the deal.
   6. The sanity test: if the whole return depends on exiting at a higher multiple than you paid, it is not an investment thesis, it is a bet on the market.

   Where candidates lose it

   Describing the mechanics with no attribution of returns. Every good LBO answer ends with which of the three drivers produces the IRR, and an acknowledgement that multiple expansion is the one you cannot control.

   Expect next

   • How do you drive returns in an LBO?
   • What makes a good LBO candidate?
   • Do a paper LBO for me.

   Reported by candidates at Truist Securities (Generalist, Charlotte, 2024); TPG (Investment Banking, New York, 2024); Advent International (Technology, Media and Telecom, Palo Alto, 2020); Lazard (Investment Banking, New York, 2026). Source: Wall Street Oasis.

4. 052How do you drive returns in an LBO?LBOIntermediatetechnicalCenterview PartnersInvestment Banking · Menlo Park · 2025TPTPGInvestment Banking · New York · 2024

   Say this

   Three levers: pay down debt with the company's cash flow, grow EBITDA through revenue and margin, and exit at a higher multiple than you paid. The first two you control, the third you mostly do not.

   Then walk it

   1. Deleveraging: every dollar of debt repaid transfers a dollar of enterprise value to the equity. At five times leverage this alone can double equity over five years with no growth at all.
   2. EBITDA growth: organic revenue growth, pricing, cost programmes, and bolt-on acquisitions. Bolt-ons are especially powerful because a small target bought at six times inside a platform valued at twelve times creates value on day one through multiple arbitrage.
   3. Multiple expansion: selling at a higher multiple, either because the market re-rated or because you made the asset more valuable, bigger, more diversified, faster-growing.
   4. A fourth, less discussed: the dividend recap. Refinancing to pull cash out early shortens the duration of the return and lifts IRR without any exit.
   5. The discipline point: a sponsor's investment committee wants to see the return work on deleveraging and EBITDA alone, with flat or lower exit multiples. Anything that only works on multiple expansion does not get approved.

   Where candidates lose it

   Naming only leverage. Leverage amplifies returns; it does not create them. And forgetting that IRR is time-sensitive, so the speed of the return matters as much as the size.

   Expect next

   • Which lever matters most?
   • What would you do in the first hundred days?
   • How does a dividend recap change the IRR?

   Reported by candidates at Centerview Partners (Investment Banking, Menlo Park, 2025); TPG (Investment Banking, New York, 2024). Source: Wall Street Oasis.

5. 053A PE firm bought a company for $1,000 and sold it for $1,000. How did they make money?LBOIntermediatetechnicalTD SecuritiesInvestment Banking · Toronto · 2026

   Say this

   Debt paydown. Enterprise value did not move, but the debt inside it shrank, so the equity slice grew. Buy at $1,000 with $700 of debt and $300 of equity; if cash flow repays $300 of debt, you sell at $1,000 and the equity is now $600.

   Then walk it

   1. Entry: $1,000 enterprise value, $700 debt, $300 sponsor equity.
   2. Over the hold, the company's free cash flow after interest pays down $300 of debt. Nothing else changes.
   3. Exit: $1,000 enterprise value less $400 remaining debt equals $600 of equity.
   4. That is 2.0 times the money. Over five years it is roughly a 15 percent IRR.
   5. Other routes to the same outcome: a dividend recap that returned cash mid-hold, or selling a division and returning proceeds while the remaining business held its value. Both put money in the sponsor's pocket without any change in headline enterprise value.

   Where candidates lose it

   Freezing because the entry and exit prices match. The question is testing whether you understand that the sponsor owns the equity, not the enterprise. Use round numbers immediately and show the two balance sheets.

   Expect next

   • What IRR is that over five years?
   • What if they had used no debt at all?
   • How else could they have made money at a flat exit?

   Reported by candidates at TD Securities (Investment Banking, Toronto, 2026). Source: Wall Street Oasis.

6. 055If I make 8 times my money in 6 years, what is my IRR?LBOIntermediatetechnicalWPWarburg PincusPrivate Equity · New York · 2012

   Say this

   About 41 percent. Eight times is two doublings and a bit: 2 times is 100 percent, 4 times is 300 percent, 8 times is 2 cubed, so the money doubles three times in six years, which is a doubling every two years. A doubling in two years is about 41 percent a year.

   Then walk it

   1. Reframe 8 times as 2 to the power of 3. Three doublings in six years means one doubling every two years.
   2. The rule of 72 in reverse: 72 divided by 2 years is 36, so roughly 36 percent. That gets you close, and the precise answer is 41 percent because the rule of 72 is an approximation.
   3. Exact check: 1.41 squared is 2, so a 41 percent annual return doubles money in two years, and three of those gives 8 times.
   4. Worth memorising the grid, because these come up constantly: 2 times in 5 years is 15 percent, 2.5 times in 5 years is 20 percent, 3 times in 5 years is 25 percent, 2 times in 3 years is 26 percent.
   5. Then say the practical caveat: IRR is time-weighted, so an early dividend recap flatters it. Money multiple and IRR can disagree, and sponsors quote whichever looks better.

   Where candidates lose it

   Trying to compute the sixth root arithmetically and stalling. Decompose the multiple into powers of two and use doublings. Interviewers are testing mental agility and whether you know the standard IRR grid cold.

   Expect next

   • Which is better, 25 percent IRR over 5 years or 30 percent over 3?
   • Why can IRR and money multiple disagree?
   • How does a dividend recap affect IRR?

   Reported by candidates at Warburg Pincus (Private Equity, New York, 2012). Source: Wall Street Oasis.

7. 056Which yields a greater return, an IRR of 25 percent over 5 years or an IRR of 30 percent over 3 years?LBOIntermediatesuperdayCenterview PartnersGeneralist · New York · 2026

   Say this

   The 25 percent over five years returns more total money: about 3.05 times against about 2.2 times. But the 30 percent is the better rate of return, so the answer depends on whether you can redeploy the capital.

   Then walk it

   1. 1.25 to the fifth is roughly 3.05 times. 1.3 cubed is roughly 2.2 times. So more absolute money from the longer hold.
   2. But IRR is an annualised rate, and 30 percent beats 25 percent per year of capital employed.
   3. The deciding question is reinvestment. If you can put that capital straight into another 30 percent deal for the remaining two years, the short hold wins comfortably: 2.2 times 1.69 is about 3.7 times.
   4. If the capital sits in cash for two years, the long hold wins.
   5. This is exactly why limited partners care about both IRR and multiple on invested capital, and why a fund with spectacular IRR from fast flips can return less cash than one with lower IRR and longer holds.

   Where candidates lose it

   Answering with only one of the two framings. The question is deliberately ambiguous, and the right move is to compute both, then name reinvestment risk as the thing that decides it.

   Expect next

   • So which would a limited partner prefer?
   • Why do funds report both IRR and MOIC?
   • How would you game an IRR?

   Reported by candidates at Centerview Partners (Generalist, New York, 2026). Source: Wall Street Oasis.

8. 062What makes a company distressed, and why restructuring?RestructuringIntermediatetechnicalEvercoreRestructuring · New York · 2025Rothschild & CoRestructuring · London · 2025

   Say this

   Distress is when a company cannot service its obligations from its cash flow, or cannot refinance a maturity. Distinguish operational distress, where the business is broken, from financial distress, where a good business carries the wrong capital structure.

   Then walk it

   1. The observable triggers: interest coverage falling toward one, a covenant breach, a maturity wall it cannot refinance, bonds trading at a deep discount to par, and a credit downgrade.
   2. Financial distress means the operations work but the balance sheet does not. The fix is a balance sheet fix: amend and extend, a debt-for-equity swap, a rights issue, a liability management exercise.
   3. Operational distress means the business itself is impaired, by a lost contract, structural decline or a broken cost base. No amount of refinancing solves that; you need an operational turnaround or a sale.
   4. The distinction drives everything about the advice, so I would establish it first in any situation.
   5. On why restructuring specifically: the work is analytically harder than M&A because you are valuing the enterprise and then allocating it across a capital structure, and the negotiation is multi-party and adversarial. It is also counter-cyclical, which is a genuine reason to want to be in it.

   Where candidates lose it

   Not separating operational from financial distress. That single distinction is the core intellectual content of restructuring, and a restructuring interviewer will hear immediately whether you have it. Also, do not answer 'why restructuring' with 'because it is counter-cyclical' alone; that reads as cynical.

   Expect next

   • What is the recovery on each claim?
   • Do you understand what we actually do here?
   • What were the recent developments in the debt space?

   Reported by candidates at Evercore (Restructuring, New York, 2025); Rothschild & Co (Restructuring, London, 2025). Source: Wall Street Oasis.

9. 064What credit metrics would you look at when analysing a company like Nike?CreditIntermediatetechnicalTSTruist SecuritiesLeveraged Finance · Atlanta · 2024

   Say this

   Leverage and coverage first: net debt to EBITDA and EBITDA to interest. Then cash conversion, free cash flow to debt, and the maturity profile. For a consumer brand I would add inventory days, because that is where the trouble shows up first.

   Then walk it

   1. Leverage: net debt to EBITDA, and gross leverage too, since cash can be trapped offshore or needed for operations. For an investment grade consumer name you would expect well under two times.
   2. Coverage: EBITDA or EBIT to interest expense, and the tighter test, free cash flow after CapEx and dividends against interest.
   3. Cash conversion: free cash flow to total debt, and EBITDA to free cash flow, which tells you how much of the reported profit is real.
   4. Liquidity and maturities: cash on hand plus undrawn revolver against the next two years of maturities. A profitable company still defaults if it cannot refinance.
   5. For Nike specifically: inventory days and the gap between revenue growth and inventory growth. When inventory grows faster than sales in a branded consumer business, discounting and a gross margin hit are coming. I would also look at wholesale versus direct mix and geographic concentration.

   Where candidates lose it

   Reciting generic credit ratios and ignoring that they named a specific company. The sector-specific metric, inventory in this case, is what shows you can actually underwrite rather than recite. Always bring one metric that fits the named business.

   Expect next

   • What line items would you look at to assess creditworthiness?
   • How would you assess a good borrower?
   • How would you qualitatively assess an entity for a rating?

   Reported by candidates at Truist Securities (Leveraged Finance, Atlanta, 2024). Source: Wall Street Oasis.

10. 065What specific line items would you look at on the financial statements when evaluating creditworthiness?CreditIntermediatetechnicalRCRBC Capital MarketsCorporate Banking · New York · 2026Wells Fargo SecuritiesGeneralist · North Carolina · 2025

    Say this

    Cash flow from operations, because that is what repays debt. Then interest expense, total debt and its maturity schedule, cash, the undrawn revolver, CapEx, and the working capital lines.

    Then walk it

    1. Start with cash from operations across several years. One good year proves nothing; consistency through a downturn proves a lot.
    2. Interest expense against EBITDA gives coverage. Debt and the maturity schedule tell you when the pressure comes.
    3. Cash and the undrawn facility are the liquidity buffer. Compare them to the next 12 to 24 months of obligations.
    4. CapEx split into maintenance and growth. Maintenance CapEx is non-discretionary, so it competes with debt service. Growth CapEx can be cut in a bad year, which is a real source of flexibility.
    5. Then the working capital lines, receivables, inventory and payables, because deterioration shows up there before it reaches the income statement. Rising receivable days means customers are struggling or revenue is being pushed.
    6. And off the face of the statements: operating lease liabilities, pension deficits, guarantees and contingent liabilities in the notes. Those are real claims that do not sit in the debt line.

    Where candidates lose it

    Staying on the income statement. Credit is about cash and claims, so the answer lives on the cash flow statement and in the notes. Mentioning the notes, and specifically contingent liabilities, is what separates a credit answer from an equity answer.

    Expect next

    • How would you assess a good borrower qualitatively?
    • What would you ask the CFO if you were the lead analyst?
    • How do you determine whether a company is good for credit investing?

    Reported by candidates at RBC Capital Markets (Corporate Banking, New York, 2026); Wells Fargo Securities (Generalist, North Carolina, 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.