Common Interview Questions from Previous Years
Behavioral
1. Tell me about your background/story/resume.
2. Tell me about your strengths and weaknesses. (Usually 3 of each)
3. Tell me about a time you were on a team and there was a conflict. How did you handle it? What role did you
play? Tell me about a difficult teammate?
4. What concerns do you have about banking?
5. An analyst is leaving to join a PE fund, how do you motivate them?
6. Why our bank? What other banks are you interviewing with? Where are we on the list?
7. I am about to go list out candidates, is there anything you want to leave me with?
8. Can you handle the hours? What were the hours like at your previous job?
9. What is the risk for us in hiring you?
10. Favorite thing about Finance?
11. Talk about a time you’ve had to take a risk.
12. Talk about some multiples for different industries.
Airlines = EV/EBITDAR
Auto = EV/EBITDAP (Pension)
Exploration/Oil = EV/EBITDAX
Technology = EV/Unique visitors, EV/Page views
13. What would you change about Stern?
14. From your readings in the newspaper, tell me about the state of interest rates and the interaction with
commodities, financial recovery, etc.
15. Tell me how you’re going to make the transition from leading large teams to leading only an analyst?
16. What would your best friend say annoys him most about you?
17. Tell me about a deal that you’re following?
18. What was your favorite class and why?
19. What’s your outlook for the economy?
20. Why banking?
21. Why Stern?
22. Tell me about a company that you invest in? What are its P/E? EV/EBITDA? Is that typical for the
industry? Why not competitors X,Y,Z?
23. What angers you?
24. Describe your leadership style?
25. Tell me about a time you had to deal with a dysfunctional team member
26. What about finance interests you?
27. Banking equals lots of hours - why should I feel comfortable that you would be able to handle the
hours?
28. What is your value proposition? Why should I hire you over some of the other candidates here today?
29. Explain why you decided to go from one job1 to job2 to job3.
Accounting Technical
1. What is the effect of an additional $10 in depreciation expense?
A. What happens to the three statements if that $10 was a mistake and you had to reverse the
transaction?
B. Also, get this without numbers, just need to talk through general impact
2. A company buys a factory for 100 using 50 in cash and 50 in debt on Dec 31. Assume a marginal tax rate of
20%, interest expense of 10%, and straight line depreciation over 10 years. Describe the impact on the three
financial statements on the date of purchase, and one year later.
3. If deferred revenue goes up by $10, what happens to the 3 statements?
4. Walk me through the 3 statements and how they interact.
5. What are deferred taxes and what causes them to arise?
6. How do you capitalize operating leases?
7. How would buying a hot dog for $2 with $1 COGS and $.50 depreciation expense affect the three financial
statements?
8. Can you ever have negative depreciation?
9. Get to FCFF and FCFE from Revenue, Net Income, CFO, EBIT, and EBITDA
10. What was your favorite topic in Accounting? Explain to me the concept.
Valuation Technical
1. Value the Half Pint / Think Coffee
2. $1/year forever, how much would you pay?
3. Walk me through a DCF
A. What is WACC?
B. How do you value cost of debt if there is no outstanding debt?
C. Would you expect Kd or Ke to be higher?
D. What assumption do you make with WACC?
4. Two companies are the same - but one is valued at 8x EBITDA and the other is 6x EBITDA. Why would one
be higher?
5. Company with low PE ratio acquires someone with high PE ratio. Is this accretive or dilutive?
6. Terminal value using GGM? Can it be negative? What’s a reasonable?
7. What is the equity risk premium value?
8. What is the current risk free rate?
9. How do you find a peer group? (size, industry, geography, risk-beta)
10. How are synergies baked into a DCF?
11. What is a typical control premium in your industry?
12. How do you value Ke if the company is private?
13. If you have Enterprise Value, how do you find the price of the IPO?
14. Why would you use an LBO model in an IPO?
15. Why is an LBO transaction high on the football field but the LBO valuation lowest?
16. How would you get to an IPO value from Enterprise Value?
17. GGM or Exit multiple for terminal value?
18. When would you use GGM?
19. When modeling a DCF, what type of information would you look for in the footnotes of a 10-Q / 10-K?
20. How would you value a private company? What Beta would you use?
21. Run me through an LBO? What are the most critical drivers? How would the LBO model for a Tech company
differ from an auto manufacture?
22. If a company had extra cash, how might it go ahead using that money?
23. If I promised to give you $100 in 10 years, how would you figure out how much you would give me now for
that? What is that number (0-25,25-50,50-75,75-100)?
24. Pick out the which company seems wrong from the group: Co 1: EV/EBITDA-7.0 EV/EBIT-8.0 Co 2:
EV/EBITDA-7.0 EV/EBIT-6.0
25. Pick out which multiple seems wrong Co 1 ROE=.10 P/B=1.0 P/E=.1, Co 2 ROE=.9 P/B=1.0 P/E=11, Co 3
ROE=.10 P/B = 1.0 P/E=.11
26. Walk me through how a company decides whether to do an IPO, sell the business, or do nothing? What
drives an IPO?
27. What is the revenue of this company you consulted for? What were its assets?
28. If you had the option when buying a car to get a $2000 refund or get free financing for 3 years, how would
you look at the problem?
29. How does taking out a loan affect EV/EBITDA if it used as cash? How about if it is payed as a dividend?
30. If you buy something for $1 and sell it for $1 in three years, how can you profit off of it?
31. ROE is 10%, P/E is 10x, P/B is .9x - what's wrong with this?
32. TEV/EBIT is smaller than TEV/EBITDA - what's wrong with this?
33. A company loses a large law suit - how does that affect their Beta?
34. In a DCF, what has a greater impact, a 1% increase in g, or a 1% increase in WACC?
Brainteasers
1. If you bought a stock and it went down 10% on day 1, then down 30% day 2, how much would you need the
stock to rise on day 3 to break even?
2. How many times do you need to sweep a clay court in a tennis tournament of 32 people? 128? 95?