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. 061Does PIK financing increase or decrease enterprise value?Leveraged financeHardtechnicalMoelis & CompanyInvestment Banking · Los Angeles · 2026

   Say this

   Neither, directly. Enterprise value is set by operating cash flows, and how you finance the business does not change them. PIK changes the split between debt and equity, and it grows the debt claim over time because the interest accrues.

   Then walk it

   1. PIK means pay in kind: the interest is not paid in cash, it capitalises onto the principal. So the debt balance compounds upward.
   2. Enterprise value is unaffected in theory, because EBITDA and cash flow are unchanged. Financing does not create operating value.
   3. What changes is the bridge. Net debt grows every year as interest accrues, so at a constant enterprise value the equity value shrinks over time. The equity is being eaten from below.
   4. The genuine second-order effects: PIK preserves cash today, which can fund growth and therefore raise EBITDA, so it can indirectly support value. And PIK accretion may not be cash-tax deductible in the same way, which weakens the tax shield.
   5. The practical reason it exists: it lets a struggling or fast-growing borrower avoid a cash interest burden it cannot currently service. It buys time and it is expensive. If the business does not grow into it, the accreting balance is what wipes out the equity.

   Where candidates lose it

   Saying enterprise value falls because debt went up. Debt is not part of enterprise value; it is part of the bridge to equity. Confusing the two here is the exact error the question is designed to expose.

   Expect next

   • How much would you pay for 2x your money on a 12 percent PIK with no compounding?
   • So what happens to the equity value over the hold?
   • When would a lender insist on PIK?

   Reported by candidates at Moelis & Company (Investment Banking, Los Angeles, 2026). Source: Wall Street Oasis.

2. 063Given this capital structure, what is the recovery on each claim?RestructuringHardsuperdayHoulihan LokeyRestructuring · New York · 2026

   Say this

   Value the enterprise first, then pay it out down the waterfall in strict seniority until it runs out. Whichever tranche the value runs out in is the fulcrum security, and that is where the equity ends up after the restructuring.

   Then walk it

   1. Establish enterprise value. In distress I would use a distressed multiple on normalised EBITDA and cross-check against a liquidation value, because the two set a range.
   2. Then the waterfall: super-priority and DIP financing first, then secured claims in order of lien priority, then unsecured bonds, then subordinated debt, then preferred, then common.
   3. Work down until the value is exhausted. Say enterprise value is $600, the revolver and term loan total $400 and recover in full, and the unsecured bonds are $400. They receive the remaining $200, so a 50 percent recovery.
   4. Those bonds are the fulcrum. They are the class that gets converted into the new equity, which is why distressed funds buy the fulcrum, not the safest paper.
   5. Everything below the fulcrum, subordinated debt and common equity, recovers nothing in a strict waterfall. In practice they often receive a small stub or warrants to buy consent and avoid a contested plan, which is a negotiation outcome rather than an entitlement.

   Where candidates lose it

   Jumping to the waterfall before establishing enterprise value. You cannot allocate what you have not measured. And missing the fulcrum concept entirely, which is the single most important idea in the discipline.

   Expect next

   • Which security would you buy?
   • What is the absolute priority rule and when is it violated?
   • What section of the indenture deals with payment waterfalls?

   Reported by candidates at Houlihan Lokey (Restructuring, New York, 2026). Source: Wall Street Oasis.

3. 066If you were in a meeting with the CFO as the lead analyst, what would you ask?CreditHardsuperdayMoody'sCorporate Finance · New York · 2018

   Say this

   I would ask about the durability of revenue, the operating leverage in the cost base, and what could stop them paying the debt. Three areas: quality of revenue, quality of cost, and capital allocation intent.

   Then walk it

   1. Revenue quality: how much is contracted or recurring, what is the retention rate of last year's customers, what is the concentration in the top five, and how is pricing holding.
   2. Cost and margin: how much of the cost base is fixed against variable, so I know what happens to margin if volume drops 15 percent. That is the operating leverage question and it drives the downside case.
   3. One-time costs: what charges hit this year that will not recur, and equally, what recurring costs have been classified as one-time. That is the quality-of-earnings question and CFOs answer it carefully.
   4. Capital allocation: what is the intent on dividends, buybacks and acquisitions, and where does leverage sit in their priorities. A CFO who will defend the rating behaves very differently from one who will lever up for a buyback.
   5. And the direct question: what keeps you up at night about the next 18 months? The answer, and the hesitation before it, is usually the most informative thing in the meeting.

   Where candidates lose it

   Asking for information you could get from the filings. A CFO meeting is for intent, judgement and things not disclosed. Asking 'what was revenue last year' wastes the access and signals you did not read the 10-K.

   Expect next

   • How would you qualitatively assess an entity?
   • What would you do if their answers contradicted the filings?
   • Which single answer would most change your rating?

   Reported by candidates at Moody's (Corporate Finance, New York, 2018). Source: Wall Street Oasis.

4. 068Tell me about the two different types of loans in the broadly syndicated loan market.Debt capital marketsHardtechnicalScotiabankDebt Capital Markets · New York · 2026

   Say this

   Pro rata and institutional. Pro rata is the revolver and the amortising term loan A, held mostly by banks. Institutional is the term loan B, bullet maturity, sold to CLOs and credit funds.

   Then walk it

   1. The pro rata tranche is the revolving credit facility plus term loan A. Banks take both together, because the revolver is a relationship product that generates ancillary business and is often undrawn.
   2. Term loan A amortises over five to seven years and prices tighter, because banks accept lower spread for the relationship.
   3. The institutional tranche is term loan B: minimal amortisation, usually one percent a year, bullet at maturity in seven years, floating rate over a benchmark like SOFR with a floor.
   4. Term loan B buyers are CLOs, loan mutual funds and credit funds. They want yield and duration, not relationship, so they price purely on credit and market conditions.
   5. The reason the split exists: the two buyer bases want completely different things. Banks want short duration and ancillary revenue; institutional investors want long floating-rate paper they can lever inside a CLO. Structuring a deal means giving each what it wants.

   Where candidates lose it

   Confusing term loan A and term loan B, or not knowing who buys each. The buyer base is the actual content of this question. If you can name CLOs as the dominant term loan B buyer, you sound like you work in the market.

   Expect next

   • Who buys term loan B, and why does that matter for pricing?
   • What is a CLO?
   • What are the different types of accounts in a CLO new issue settlement?

   Reported by candidates at Scotiabank (Debt Capital Markets, New York, 2026). Source: Wall Street Oasis.

5. 075What are you seeing in your coverage sector right now, and where is the opportunity over the next 12 to 24 months?Markets and dealsHardsuperdayLazardMergers and Acquisitions · New York · 2026NomuraGeneralist · San Francisco · 2026

   Say this

   Answer like a banker pitching, not a student summarising. Name the structural change in the sector, then the deal type it generates, then the specific companies you would call.

   Then walk it

   1. Open with the structural driver. Something like: the sector has too many subscale players and a cost base that only works above a certain revenue level, so consolidation is inevitable.
   2. Then name the deal type that follows. Structural overcapacity means mergers of equals and take-privates. A regulatory change means carve-outs. A technology shift means acquisitions of capability.
   3. Then be specific about targets and buyers. Two or three names with a reason each. This is the part almost nobody does, and it is the part that gets you the offer.
   4. Then the constraint. What is stopping these deals from happening today, financing cost, a valuation gap, antitrust, a founder who will not sell? Naming the blocker shows you are thinking commercially.
   5. Close with the actual pitch: 'so over the next year I would expect the mid-cap names to be taken out, and the call I would make is to X.'

   Where candidates lose it

   Giving a sector summary with no deal thesis. Coverage bankers get paid to originate. If your answer does not end with a transaction and a name, you have answered a different question.

   Expect next

   • Who would buy them?
   • What is stopping that deal today?
   • Pitch me a company.

   Reported by candidates at Lazard (Mergers and Acquisitions, New York, 2026); Nomura (Generalist, San Francisco, 2026). Source: Wall Street Oasis.

6. 077Why is crypto lagging gold when both are meant to be hedges, and how is AI affecting equities and rates?Markets and dealsHardsuperdayNomuraGlobal Markets · New York · 2026

   Say this

   Because they are not the same hedge. Gold is a long-duration store of value with central bank demand behind it. Crypto has traded as a high-beta risk asset, correlated with tech, not as a haven.

   Then walk it

   1. The empirical point first: crypto's correlation has been with the Nasdaq, not with gold. It sells off when risk appetite falls, which is precisely when a hedge is supposed to work.
   2. Gold's bid is structurally different. Central bank buying, particularly reserve diversification away from dollar assets, is price-insensitive demand that crypto does not have.
   3. So the narrative of digital gold has not been validated by the correlation data, and that gap is the answer.
   4. On AI and equities: it has concentrated index returns in a handful of names, so index-level valuation is misleading. It has also turned a capital-light sector into a capital-heavy one, because hyperscaler capital expenditure is now enormous.
   5. On AI and rates: that capital expenditure is increasingly debt-funded, which means real issuance and upward pressure on yields at the long end. And the longer-run question is whether AI raises productivity enough to lift potential growth, which would raise the neutral rate.
   6. If I had to give one view: the AI trade has shifted from a margin story to a capital intensity story, and that is why it now shows up in credit markets as well as equity.

   Where candidates lose it

   Accepting the premise that both are hedges. The question contains a false assumption and the right move is to challenge it with the correlation evidence. Then pick one clear view on AI rather than describing both sides.

   Expect next

   • So would you own either?
   • What would change your view on crypto's correlation?
   • How is AI capital expenditure being funded?

   Reported by candidates at Nomura (Global Markets, New York, 2026). Source: Wall Street Oasis.

7. 082Why should I buy your college, and how much would you sell it for?Case and estimationHardsuperdayWMWellington ManagementInvestment Research · Boston · 2024WMWellington ManagementEquity Research · Boston · 2024

   Say this

   Pitch it as a subscription business with pricing power and a real estate portfolio attached. Revenue is tuition times enrolment plus research grants and endowment income; the assets are the campus and the brand.

   Then walk it

   1. The investment case: extremely sticky revenue, since a student enrolled is contracted for three or four years, pricing power that has historically exceeded inflation, and a brand that is effectively impossible to replicate.
   2. Revenue build: enrolment times net tuition after scholarships, plus housing and dining, plus research funding, plus endowment draw. Be explicit that gross tuition overstates it badly because of discounting.
   3. Cost base: mostly faculty and staff, largely fixed, which means high operating leverage in both directions. A 10 percent enrolment drop is devastating; a 10 percent rise is almost pure margin.
   4. Valuation on two bases and take the higher. As a going concern, a DCF or an EBITDA multiple on the operating surplus. As an asset play, the campus real estate plus the endowment, which for many institutions exceeds the operating value.
   5. Then the risks that make the price: demographic decline in the applicant pool, regulatory dependence on public funding and visa policy for international students, and the fact that you cannot actually cut faculty quickly. And I would flag that the brand is inseparable from the non-profit status, so a buyer might destroy the asset by acquiring it.

   Where candidates lose it

   Treating it as a whimsical question. It is a full valuation case wearing a joke. The two highest-value moves are separating gross from net tuition, and recognising that the real estate and endowment may be worth more than the operations.

   Expect next

   • How would you IPO it?
   • How would a college increase revenue?
   • What would you do in the first year as owner?

   Reported by candidates at Wellington Management (Investment Research, Boston, 2024); Wellington Management (Equity Research, Boston, 2024). Source: Wall Street Oasis.

8. 084How would you value an insurance brokerage that operates in one country that has just had a coup and writes only one line of coverage?Case and estimationHardsuperdayPerella Weinberg PartnersFinancial Institutions Group · New York · 2026

   Say this

   Start from the normal brokerage framework, which is a commission stream on premium, then attack it with the two facts they gave you: extreme country risk and total product concentration. The answer is a wide range with a real chance of zero.

   Then walk it

   1. The base framework: a broker earns commission on premium and holds no underwriting risk, so it is a capital-light, high-margin, recurring revenue business that normally trades at a premium multiple on EBITDA.
   2. Now the coup. The currency may be unconvertible, so you may not be able to repatriate cash at all. That alone can make a profitable business worth little to a foreign buyer.
   3. Country risk enters the discount rate through a sovereign spread, and in a post-coup situation that could be well over 1,000 basis points. It also enters the cash flows, because premium volumes fall when economic activity stops.
   4. Single line of coverage means no diversification. If that line is motor and vehicle imports halt, or it is trade credit and trade stops, revenue can go to near zero. So I would model scenarios rather than a base case: functioning state, prolonged instability, and asset seizure.
   5. So: probability-weight the scenarios, discount at a rate that reflects the sovereign, and cross-check against what a local buyer would pay, because a domestic acquirer does not face the repatriation problem and will value it far higher than a foreign one.
   6. The honest conclusion is that the identity of the buyer determines the value here more than the cash flows do.

   Where candidates lose it

   Running a standard brokerage multiple and ignoring the two facts in the question. The coup and the single line are the question. And missing the repatriation point, which is the specific insight that makes the foreign buyer's value different from the local buyer's.

   Expect next

   • Who would actually buy it?
   • How would you size the country risk premium?
   • What if the currency is pegged but not convertible?

   Reported by candidates at Perella Weinberg Partners (Financial Institutions Group, New York, 2026). Source: Wall Street Oasis.

9. 085Given a B2B SaaS company with this EBITDA and this P/E, what would you do to improve its operations and financials?Case and estimationHardsuperdayHoulihan LokeyInvestment Banking · New York · 2026

   Say this

   Work the SaaS levers in order of value: pricing, then retention, then sales efficiency, then cost. In software, a point of net revenue retention is worth more than a point of cost saving, because it compounds.

   Then walk it

   1. Pricing first. Most B2B software is underpriced relative to the value it delivers. Move to value-based or usage-based pricing, introduce tiers, and raise prices on renewal for the existing base. This is near-pure margin.
   2. Retention second. Net revenue retention above 110 percent means the installed base grows without new sales. Reduce churn in the weakest cohort and upsell modules into the strongest. This changes the growth rate and therefore the multiple.
   3. Sales efficiency third. Look at customer acquisition cost payback and the magic number. If payback is over 24 months, the problem is targeting or pricing, not effort. Reallocate spend to the segments with the fastest payback.
   4. Cost fourth, and deliberately last. Consolidate the cloud bill, rationalise the product portfolio, offshore support engineering. Real money, but it does not change the growth story.
   5. Then the bolt-on question: in a fragmented software vertical, acquiring adjacent modules at a lower multiple and cross-selling them into your base is usually the single largest value-creation lever available.
   6. One flag on the question itself: P/E is an odd metric for a software company, since GAAP earnings are suppressed by growth spend and stock compensation. I would work off EV/ARR and EV/EBITDA instead, and I would say so.

   Where candidates lose it

   Jumping to cost cutting. In software, growth and retention drive the multiple, and the multiple drives the value far more than a margin point does. Also worth noticing that P/E is the wrong lens here; naming that is a real signal.

   Expect next

   • What is the formula for net revenue retention, gross retention and churn?
   • Which of those levers moves the multiple?
   • How would you verify the pipeline to forecast revenue?

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

10. 087How would you verify the validity of a client's sales pipeline in order to forecast revenue?Case and estimationHardsuperdayHWHarris WilliamsInvestment Banking · Richmond · 2025

    Say this

    Test it historically before you believe it prospectively. Take last year's pipeline, see what actually converted by stage, and apply those real conversion rates rather than management's assumed ones.

    Then walk it

    1. Back-test first. Pull the pipeline as it stood 12 months ago and compare it to what closed. If management said 60 percent of late-stage would convert and 30 percent did, you now have the real number and the size of their optimism.
    2. Test the stage definitions. A verbal indication is not a late-stage opportunity. Ask what evidence is required to move a deal between stages, and whether that discipline is enforced in the CRM.
    3. Check the vintage of each opportunity. Deals sitting in the pipeline for three times the average sales cycle are usually dead and not yet marked dead. They inflate the total.
    4. Check concentration. If three opportunities are half the pipeline, the forecast is not a probability distribution, it is three binary bets. Diligence those three individually and talk to those customers if the process allows.
    5. Cross-check against capacity. Does the forecast require more closed deals per salesperson than the team has ever achieved? And check whether headcount to deliver it is actually in the plan.
    6. Then rebuild the forecast bottom-up with your own conversion rates, and present it as a range against management's case. The gap between the two is one of the most valuable things you can hand a buyer.

    Where candidates lose it

    Accepting the pipeline and only sanity-checking the arithmetic. The technique is historical back-testing of conversion by stage. If you do not say that, you have not answered it.

    Expect next

    • What if they have no historical pipeline data?
    • How would that change your valuation?
    • What would you do if the top three opportunities were all with one customer?

    Reported by candidates at Harris Williams (Investment Banking, Richmond, 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.