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. 021What are the main valuation methodologies, with the pros and cons of each?ValuationCoretechnicalCenterview 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

   1. 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.
   2. 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.
   3. 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.
   4. 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.
   5. 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.

2. 022Rank the valuation methodologies from highest to lowest and explain why.ValuationIntermediatesuperdayNomuraInvestment Banking · New York · 2026

   Say this

   The usual ordering is precedent transactions highest, then DCF, then trading comps, with an LBO analysis lowest. But I would say upfront that this is a tendency, not a rule, and I can construct cases where it inverts.

   Then walk it

   1. Precedents sit highest because they include a control premium and often synergies a strategic buyer was willing to pay for.
   2. DCF usually sits above trading comps because sell-side forecasts tend to be optimistic, and because you are capturing the full life of the cash flows.
   3. Trading comps reflect minority stakes with no control, so they exclude the premium.
   4. LBO analysis is normally the floor, because a sponsor needs a target return and cannot pay for synergies it does not have.
   5. The inversions are the interesting part. In a frothy market, trading comps can exceed precedents from a downturn. And a strategic with real cost synergies can beat any sponsor, which is why the sponsor floor is not always the floor.

   Where candidates lose it

   Delivering the ranking as gospel. Interviewers ask this specifically to see whether you understand the logic or memorised a ladder. Name the ordering, give the reason for each rung, then volunteer a case where it flips.

   Expect next

   • Give me a case where trading comps exceed precedents.
   • Would Blackstone or Nike pay more to acquire Adidas?
   • Who typically pays more, a sponsor or a strategic?

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

3. 023Where is the premium baked in in precedent transactions?ValuationIntermediatetechnicalUBSInvestment 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

   1. 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.
   2. So the premium is inside the numerator and therefore inside the multiple itself. You do not add a premium on top afterwards.
   3. That is exactly why precedent multiples run above trading multiples for the same sector.
   4. 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.
   5. 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.

4. 024Walk me through how you would find comps and precedents for a company.ValuationIntermediatetechnicalEvercoreInvestment Banking · Menlo Park · 2025

   Say this

   Start from what the business actually does and who it competes with, then screen on size, growth, margin and geography. For precedents, screen deals in the same sub-sector over the last three to five years, then throw out the ones with special circumstances.

   Then walk it

   1. First pass on business model, not SIC code. A software company selling to hospitals belongs with healthcare IT, not with enterprise software generally.
   2. Practical sources: the target's own filings name its competitors, equity research initiation reports carry a comp set, and any prior deal in the space has a fairness opinion with a comp list in it.
   3. Then screen for comparability on scale, growth rate, margin profile and end-market mix. A company growing 30 percent does not belong with one growing 3 percent, whatever the sector.
   4. For precedents, filter on date, size and deal type, and separate strategic buyers from sponsors, because they pay differently.
   5. Last step is the judgement call: exclude distressed sales, minority stakes and deals with unusual structures, and be ready to defend every exclusion, because the client will ask.

   Where candidates lose it

   Saying 'I would pull them from Capital IQ' and stopping. The screen is the easy part; the defensible judgement about who belongs in the set is the job. Name your inclusion criteria and your exclusions.

   Expect next

   • How many comps is the right number?
   • Your best comp trades at a huge premium to the rest. What do you do?
   • Build me a buyer universe for this company.

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

5. 025What is EV/EBITDA and when would you use it?ValuationCorephone / HireVueWBWilliam 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

   1. Enterprise value is capital-structure neutral, and EBITDA is pre-interest, so numerator and denominator match. Both belong to all capital providers.
   2. It strips out D&A, so it lets you compare an asset-heavy company with an asset-light one on operating performance.
   3. 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.
   4. 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.
   5. 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.

6. 026What happens to the EV/EBITDA multiple when EBITDA increases?ValuationIntermediatetechnicalJefferiesInvestment Banking · New York · 2025

   Say this

   Mechanically the multiple falls, because the denominator grew and enterprise value is fixed at a point in time. But that is only true for an instant, because in a real market EV would move too.

   Then walk it

   1. Holding EV constant, a bigger denominator means a smaller multiple. That is just arithmetic.
   2. In reality, if EBITDA rises because the business genuinely improved, the market re-rates the equity and EV rises, often more than proportionally if growth expectations improve.
   3. So the multiple could stay flat or even expand, depending on why EBITDA moved.
   4. If EBITDA rose for a low-quality reason, say a one-off gain or an accounting change, EV should not move and the multiple genuinely compresses.
   5. The useful framing: the multiple is an output, not an input. Ask what caused the EBITDA change and the answer follows.

   Where candidates lose it

   Giving only the mechanical answer and looking pleased. The interviewer is waiting to see whether you notice that EV is not actually constant. Give both layers, and the 'why did EBITDA move' framing.

   Expect next

   • So is the multiple an input or an output?
   • What if EBITDA rose because of a one-time gain?
   • How would you adjust EBITDA for quality?

   Reported by candidates at Jefferies (Investment Banking, New York, 2025). Source: Wall Street Oasis.

7. 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.

8. 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.

9. 029Can you think of an asset or company where you would not calculate a terminal value and would just forecast cash flows for a set number of years and stop?ValuationHardtechnicalBPBNP ParibasInvestment Banking · New York · 2026

   Say this

   Anything with a contractually finite life. A mine with defined reserves, a pharmaceutical asset with a patent cliff, a toll road or power plant on a concession that reverts to the state, or a single-property real estate asset you will sell.

   Then walk it

   1. A mine or oilfield has a reserve life. When the resource is gone the cash flows are gone, so a perpetuity would be fiction. You forecast to depletion and add any salvage or remediation cost.
   2. A patented drug loses most of its economics at expiry when generics enter. You forecast through the cliff and apply a steep decline, not a growing perpetuity.
   3. Concession assets like toll roads, airports and power purchase agreements have a contractual end date and often hand the asset back for nothing.
   4. Project finance generally works this way, which is why the metric is often an equity IRR over the concession rather than a perpetuity value.
   5. The test I would apply: is there a contract or a physical limit that ends the cash flows? If yes, no terminal value. Gordon growth assumes the business outlives you, and these do not.

   Where candidates lose it

   Not having a single concrete example ready. This question is easy if you can name a mine or a patent cliff, and impossible if you only know the Gordon growth formula. Have two examples ready and state the test.

   Expect next

   • How would you handle the patent cliff specifically?
   • What about remediation costs at the end of a mine's life?
   • How does this change the discount rate you use?

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

10. 030Walk me through what happens to WACC when leverage rises, and tell me whether shareholder value actually changed.ValuationHardsuperdayCenterview PartnersInvestment Banking · New York · 2026

    Say this

    WACC falls at first, because you are swapping expensive equity for cheaper tax-deductible debt, then rises again as distress risk takes over. So there is a U shape. Whether shareholder value changed depends on whether the tax shield outweighs the distress cost.

    Then walk it

    1. Early leverage lowers WACC because debt is cheaper than equity and interest is deductible. The tax shield is a genuine transfer of value from the government to the capital providers.
    2. But as leverage rises, equity gets riskier, so cost of equity climbs. Lenders also reprice, so cost of debt climbs. Eventually both swamp the tax benefit and WACC turns back up.
    3. In a world with no taxes and no bankruptcy costs, Modigliani-Miller says the value of the firm is unchanged and you have only reshuffled claims. That is the reference case.
    4. In the real world the tax shield adds value and financial distress subtracts it, so there is an optimum somewhere in the middle. That is the whole theory of capital structure.
    5. So the honest answer to the second half is: shareholder value changed, but not because WACC fell. It changed because of the tax shield net of distress and agency costs. Falling WACC is a symptom, not the cause.

    Where candidates lose it

    Saying 'WACC falls so value goes up, therefore infinite leverage is optimal'. The interviewer asked the second half specifically to catch that. You must separate the mechanical WACC effect from the economic source of value.

    Expect next

    • So what is the optimal capital structure?
    • Can debt ever be more expensive than equity?
    • Why does Modigliani-Miller not hold in practice?

    Reported by candidates at Centerview Partners (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.