Investment Banker Interview Questions (With Hints)
6 questions covering behavioral, technical, and situational scenarios. Each answer hint reflects what interviewers at top companies are actually evaluating.
Behavioral Questions
Q: Tell me about a transaction you've followed in the news recently. Would you have advised the acquirer to proceed?
What they're looking for: Demonstrates market awareness and ability to apply valuation and strategic rationale — pick a recent M&A deal and have an actual opinion on the deal rationale and valuation multiple paid.
Technical Questions
Q: Walk me through a discounted cash flow analysis step by step.
What they're looking for: Project FCF over 5–10 years, discount at WACC, calculate terminal value (Gordon Growth or exit multiple), sum to enterprise value, then bridge to equity value.
Q: How does a $100 increase in depreciation affect the three financial statements?
What they're looking for: Income statement: operating income down $100, net income down $65 (assuming 35% tax). Cash flow: add back $65 non-cash. Balance sheet: retained earnings down $65, PP&E down $100.
Q: What makes a good LBO candidate?
What they're looking for: Stable, predictable cash flows; strong margins; minimal capex; existing management team; defensible market position; and a clear exit strategy (strategic buyer, IPO, or dividend recap).
Q: How would you value a company with negative earnings?
What they're looking for: EV/Revenue, EV/Gross Profit, EV/EBITDA of next positive-EBITDA year, or precedent transaction multiples. DCF remains useful if future cash flows are positive and defensible.
Situational Questions
Q: You're an analyst on a live deal and you discover your MD's model has a significant error at 11pm before a 9am board meeting. What do you do?
What they're looking for: Fix it immediately, notify the associate, present a corrected version with explanation to the MD regardless of the hour — in IB, being right at the last minute beats wrong on time.
How to Prepare
For behavioral questions, prepare 6–8 specific stories from your experience using the STAR format (Situation, Task, Action, Result). Practice answers out loud — not in your head — at least three times per question. Technical questions for Investment Banker roles require domain-specific preparation; review the skills list and be prepared to demonstrate hands-on knowledge, not just conceptual understanding.