投资银行针对MBA生的面试问题及参考答案

A collection of real questions asked in IBD at MBA level

Source: EfinancialCareers

Below are a collection of real questions that were asked of investment banking candidates at the MBA level, along with suggested answers that they later put together. If you find yourself on a …superday‟ interview at a big bank, you can bet that you‟ll be asked at least of few of these questions. Disagree with an answer? Let us know in the comments below.

Explain an LBO (leveraged buyout) to my grandmother, who knows nothing about finance

An LBO is a transaction in which a party purchases a business and brings it private. The transaction is funded using a large portion of debt. Three main characteristics of LBOs – 1) high debt, which is intended to be paid down, 2) incentives, managers are given greater stake in business, 3) private ownership, many LBOs go public again once debt has been paid down.

If a company was looking to raise debt or equity, what are the 3 most important questions to ask?

1) Whether they will generate enough cash flows to cover interest obligations. How many multiples in excess of current interest payments is their operations generating in cash flow?

2) What is their current capital structure and can they bring on more debt and leverage the company further without being too levered versus industry and peers so that their credit rating and stock price isn‟t negatively impacted.

3) What is the current equity value? If the stock price is appropriately valued or has a potentially high value, then equity might be better.

How does FED change the interest rates?

The FED can adjust the Federal Funds Rate which is the interbank overnight rate at which the FED lends money. The lower the Federal Funds Rate, the lower real interest rates. The FED can also adjust the money supply through the purchase or sale of government bonds, whereby affecting inflationary expectations which will adjust nominal interest rates.

What would be the difference between the interest coverage rate of a senior board vs. junior debt?

Interest coverage rate is operating income divided by interest expense

(EBIT/interest). This basically measures how much leadway a company has between its earnings and interest payments (a hurdle they must keep jumping to avoid default).

In event of bankruptcy, the senior debt would have to be paid before the junior. However, when using the interest coverage ratio to analyze a company‟s ability to keep up with their debt payments, I would look at the EBIT divided by ALL forms of debt as a failure to make payments for any form of debt results in default.

How does Net Income flow into the Balance Sheet, Income Statement and Statement of Cash Flows?

The Net Income on the bottom line of the income statement gets added into the retained earnings on the balance sheet. The net income from the income statement is also the starting line of the statement of cash flows.