typical interview questions for summer internship

<p>I have a few interviews coming up, so I was wondering what some of the more typical technical and fit questions are? Especially any that may catch someone off guard. Some I have compiled are:</p>

<p>What kind of merger was it (accretive or dilutive) when a company aquired another company with a higher P/E?
What is enterprise value?
Run me through a DCF
How do you value a company?
Describe a time when you were instrumental in helping a group reach a consensus or a plan
Describe an ethical situation you encountered
What is your greatest failure? What did you learn from it?
If you were CEO what 3 things would you change about the firm?
What is a stock/bond you recommend?
When have you worked in a team?
What is the biggest risk you’ve ever taken?
What is your biggest weakness?</p>

<p>bump!</p>

<p>oh my gawd, we need to know the technical aspects of IB in such detail?! wow.thank you SO much for posting this!</p>

<p>By P/E, I'm guessing you mean Private equity?</p>

<p>I know P/E is the price of the share divided by the earnings per share (eps)</p>

<p>but i was wondering what enterprise value is
i remember reading it but it just didn't make sense to me</p>

<p>EV is calculated as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents.</p>

<p>at the risk of sounding like a complete idiot, how much information are we required to know about ibanking? i have NO clue what enterprise value was defined by, and there are several other things im sure im clueless about. what should i have a general knowledge of?</p>

<p>Hi</p>

<p>I read this post 2 times. It is very useful.</p>

<p>Pls try to keep posting.</p>

<p>Let me show other source that may be good for community.</p>

<p>

</p>

<p>The questions he posted are very, VERY basic investment banking interview questions. I suggest you get vault guide or some other finance interview guide if you don’t know the answer to these questions.</p>

<p>Other common questions could be things like “how does depreciation going up by $10 affect a company’s three financial statements” or “how do you calculate a firm’s discount rate”</p>

<p>

</p>

<p>No P/E refers to price/earnings. A company with a higher P/E acquiring another company with a lower P/E in an all stock deal would be accretive (as in EPS of the acquirer goes up)</p>

<p>here are some other basic technical questions:</p>

<ul>
<li>how would you value a company? </li>
<li>Walk me through a DCF valuation. </li>
<li>Of the three methodologies which one is likely to result in a higher/lower value? why?</li>
<li>What is the difference between a comparable & a competitor?</li>
<li>What are common valuation metrics?</li>
<li>What is EBITDA & why is it used?</li>
<li>Why can’t you use EV/Earnings or Price/EBITDA as valuation metrics?</li>
<li>What is the difference between Enterprise Value & Equity Value?</li>
<li>How is Enterprise Value calculated?</li>
<li>Why do you subtract cash from enterprise value formula?</li>
<li>What is minority interest and why do you add it back to enterprise value?</li>
<li>What is the difference between basic and fully diluted shares?</li>
<li>How do you use the Treasury Stock Method to calculate fully diluted shares?</li>
<li>Which is less expensive capital, debt or equity?</li>
<li>Walk me through an accretion/dilution analysis.</li>
<li>What factors can lead to dilution of EPS in an acquisition?</li>
<li>Why might one company want to acquire another?</li>
<li>Explain the concept of synergies & provide examples.</li>
<li>What is working capital?</li>
<li>What are deferred taxes?</li>
<li>What is goodwill and how is it calculated?</li>
<li>What happens to each of the three financial statements if X (usually something like depreciation, etc.) increases/decreases?</li>
</ul>

<p>for S&T, I felt the questions were a bit more technical and related to markets and trading in general. A few questions that I faced last time were as follows.
a) What is a plain vanilla interest rate swap?
b) What is a convertible bond?
c) What does a rising yield curve indicate?
d) In a CDO, if the default correlations increase over time what will happen? How should the investor be compensated?
e) How does an ETF work?
May be some questions regarding CAPM and its applicability.</p>

<p>These were just for S&T, Barclays and Goldman in particular.</p>