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. 069Explain the different ways a firm might finance itself, besides straight equity and debt.Capital structureIntermediatetechnicalHSBCGeneralist · New York · 2024TSTruist SecuritiesCorporate Banking · Atlanta · 2025

   Say this

   Everything in between: convertible bonds, preferred stock, mezzanine and PIK, plus asset-based routes like securitisation, sale-leaseback, factoring and equipment leasing. And structural options like a rights issue or a convertible preferred.

   Then walk it

   1. Hybrid instruments sit between the two: convertible bonds give a low coupon in exchange for equity upside, preferred stock ranks ahead of common with a fixed dividend, and mezzanine or PIK sits below senior debt with equity warrants attached.
   2. Asset-based financing monetises specific assets rather than the whole enterprise: asset-backed lending against receivables and inventory, securitisation of a receivables pool, factoring, and equipment leasing.
   3. Sale-leaseback converts owned real estate into cash while keeping the operational use. It is off-balance-sheet in spirit, though under current standards the lease liability comes back on.
   4. Operational financing is often overlooked: stretching supplier terms, customer prepayments and deferred revenue are all working capital funding, and they cost nothing.
   5. And there are equity variants: rights issues to existing holders, PIPEs, convertible preferred for a strategic investor, and in some markets government or development-bank funding for specific projects.
   6. The structuring logic is to match the funding to the asset. Long-lived assets get long-dated debt, receivables get revolving asset-based facilities, and uncertain growth gets equity or something convertible.

   Where candidates lose it

   Listing instruments with no organising principle. Group them, hybrids, asset-based, operational, equity variants, and finish with the matching principle. A list without a frame reads like flashcards.

   Expect next

   • When would you advise a convertible over straight equity?
   • What are the primary categories of collateral securing an asset-based loan?
   • What is the difference between a loan and a bond?

   Reported by candidates at HSBC (Generalist, New York, 2024); Truist Securities (Corporate Banking, Atlanta, 2025). Source: Wall Street Oasis.

2. 070What happens to EPS if a company issues debt to buy back shares?Capital structureIntermediatetechnicalDeutsche BankInvestment Banking · San Francisco · 2025

   Say this

   EPS usually rises, because the share count falls faster than net income does. It is accretive as long as the after-tax cost of the new debt is below the earnings yield of the stock you are buying.

   Then walk it

   1. Net income falls by the after-tax interest on the new debt. Share count falls by the shares repurchased. EPS is the ratio, so the direction depends on which falls proportionally more.
   2. The test: compare the after-tax cost of debt to the stock's earnings yield, which is the inverse of its P/E. Debt at 6 percent pre-tax is 4.5 percent after tax. A stock at 15 times P/E has a 6.7 percent earnings yield. Accretive.
   3. Flip it: a stock at 30 times P/E has a 3.3 percent earnings yield, below the 4.5 percent after-tax cost. Dilutive. Which is why expensive stocks should issue equity, not buy it back.
   4. Say the number to prove you can do it: $1,000 of debt at 6 percent costs $45 after tax at a 25 percent rate. If that buys 100 shares out of 1,000 and net income was $100, EPS goes from $0.10 to $55 over 900 shares, which is $0.061. Dilutive in that case, and the arithmetic tells you immediately.
   5. Then the value point: higher EPS does not mean more value. You have raised leverage, so the equity is riskier and the multiple should compress. Rearranging the capital structure does not create value on its own.

   Where candidates lose it

   Answering 'EPS goes up' with no condition. It depends entirely on the relationship between the cost of debt and the earnings yield. And stopping at EPS without noting that the multiple should fall as leverage rises.

   Expect next

   • So when is a buyback value-destructive?
   • What are the different ways to use excess cash?
   • How does this change the company's WACC?

   Reported by candidates at Deutsche Bank (Investment Banking, San Francisco, 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.