IBD Technical Interview Prep 10th Nov

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How would underfunded pensions affect the Enterprise Value of a company?

How do you find the number of fully diluted shares outstanding?
What are the pros and cons of using the ratio EV/EBITDA?
How do you lever and unlever beta? Why is it necessary to unlever beta?
How would you perform an accretion/dilution analysis?
If I am advising the owner of a private business on exit strategies. Walk me
through the various alternatives and valuations.
7) Tell me how to capitalize operating leases and the impacts on the statements.
8) Why would you do a LBO analysis?
9) How would you value a company?
10)
Walk me through a DCF analysis.

IBD Technical Interview Prep 13th Nov

1) Walk me through how Depreciation going up by $10 would affect the
statements
2) Recently, banks have been writing down their assets and taking huge
quarterly losses. Walk me through what happens on the 3 statements when
theres a write-down of $100.
3) What types of sensitivity analyses would we look at in a DCF?
4) Why do deferred tax liabilities (DTLs) and deferred tax assets (DTAs) get
created in M&A deals? How do DTAs and DTLs affect equity value?
5) How do you value companies in the following industries:
a. Banking
b. Mining
c. Oil&gas
6) What are the key matrices and drivers in the banking industry?
7) How do you quantify synergies? Please provide an example.
8) In the context of capital raisings, please walk me through the benefits of
raising capital from strategic and financial investors?
9) Is negative working capital good or bad for companies?
10)
Explain what a contribution analysis is and why we might look at it in a
merger model
11)
Why might a private equity firm allot some of a companys new equity in
an LBO to a management option pool, and how would this affect the model?

IBD Technical Interview Prep 17th Nov

1) Normally Goodwill remains constant on the Balance Sheet why would it be
impaired and what does Goodwill Impairment mean?
2) If a company changes its method of inventory valuation from LIFO to FIFO in
an inflationary environment, what is the impact on the 3 financial
statements?
3) What multiples are traditionally stated as financing parameters for an LBO?
4) What are the implications for cash dividends vs share buybacks? Why would
you use one instead of the other?
5) What do you know about the recent proposed acquisition of SABMiller by
ABInBev? What are the transaction rationales?

6) What do you know about the recent proposed acquisition of Starwood by

Mariott International? What are the transaction rationales?
7) Given that leverage brings value through tax shield, should not companies
have high leverage? If not, why? What is the companys optimum capital
structure?
8) Walk us through FCFE.
9) What quantitative and qualitative factors drive the P/E multiples?
10)
What are the differences between WACC and APV?
11)
Please discuss the different effects and motivation behind increasing
dividend, paying special dividend, and share buybacks?
IBD Technical Interview Prep 20th Nov
1) How is it possible for a company to show positive net income but still go
bankrupt?
2) Why might one company trade at a higher multiple than another?
3) If a company trades at a forward PE of 20, and acquires a company trading at
a forward PE of 13. Assuming the deal is 100% stock-for-stock, and a 20%
premium is being offered, will the deal be accretive in year 1?
4) How do you know if your DCF is too dependent on future assumptions?
5) What is an exchange ratio and when would companies use it in an M&A deal?