Commonly Asked I-Banking Interview Questions

1. Tell me about yourself. / Walk me through your resume. (by far the most important question asked)


2. Why investment banking? (the second most important question)


3. How do you get to Free Cash Flow (FCF) from EBIT (or Net Income)?


4. Once you get to FCF, then what?


5. In picking a stock, what do you typically look at?


6. If you have $1 more of depreciation, how does that flow through the income statement, balance sheet, and statement of cash flows?


7. Why finance?


8. Would you rather have $100 today or $200 four years from now?


9. What are the formulas for CAPM, WACC, and Terminal Value?


10. What is Terminal Value?


11. How do you value a company?


12. How would you value a sandwich shop on Wall Street?


13. Are markets efficient?


14. Explain accretion and dilution.


15. How do you calculate Enterprise Value?


16. What is 7 cubed (7^3)?


17. What is the square root of 3?


18. What is 16*14?


19. What is 18*18?


20. What is an asset beta and how do you calculate it?


21. If you have tow dice, both with six sides, what is the probability that when you roll both, they will sum to less than three?


22. Is it mathematically/financially possible to buy a company for $100 million, sell if for $100 million, and make $80 million? If so, how? If not, why not? (Hint: LBO)


23. How do the three major financial statements interrelate?


24. What is the difference between fundamental and technical analysis?


25. What was your SAT score?