Investment Banking
30 valuation questions of the kind asked in investment banking interviews. Each carries a model answer, the concepts a complete response must hit, and graded feedback on your own attempt.
Tests whether a candidate treats reported NAV as evidence rather than fact.
How would you assess whether a private equity fund's reported NAV is reliable?
A practical valuation check in an equity-manager analyst interview.
A portfolio has three holdings: 50% in a company trading at 10x forward earnings, 30% at 20x and 20% at 30x. Calculate the weighted-average forward P/E. Then explain why that number alone is not enough to call the…
A common follow-up that separates valuation work from demand discovery.
How would an ECM bank set an indicative IPO price range for a company?
A common interview question for candidates expected to explain ratings and valuation to clients.
A stock trades at $40. Your forecast is $3.00 of next-year EPS and you believe 18x is the appropriate forward P/E multiple. Set a price target and explain what else belongs in the recommendation.
Standard opener before the interviewer drills into whichever one you seem least sure about.
What are the three primary valuation methodologies? Rank them by the valuation they typically produce and explain why.
A foundational pricing concept in a secondaries interview.
An LP interest is offered at 85% of NAV. What does that tell you, and what does it not tell you?
The Rule of 40 is the core software valuation framework. This tests understanding of growth vs profitability.
Explain the Rule of 40 for software companies. How is it calculated, and what does it tell you about the company's balance of growth and profitability?
Practical question about the deliverable analysts actually produce.
What is a football field chart, how is each range constructed, and how would you respond if the client says your valuation range is too wide?
Tests whether you can critique the tools you use.
Compare EV/EBITDA and P/E. Give a specific situation where each one gives a misleading signal.
Scenario analysis is critical to managing uncertainty. This tests quantitative thinking.
You're valuing a company with significant uncertainty around growth rates and margins. How do you structure and weight scenarios to arrive at a fair value estimate?
The core FIG valuation question. EV/EBITDA doesn't work for financials.
Why doesn't EV/EBITDA work for banks, and what metrics do you use instead?
Asset management valuation is different from banking. This tests understanding of fee-based models.
What metrics do you use to value an asset manager, and why is P/E more relevant than P/TBV?
Insurance valuation uses different metrics than banking. This tests sector-specific knowledge.
What metrics do you use to value an insurance company, and how do they differ from bank valuation metrics?
Digital health is a growing subsector with unique economics. This tests understanding of new business models.
Digital health companies (telehealth, health IT, digital therapeutics) have different economics than traditional healthcare. How do you value them, and what metrics matter?
Tests whether you understand sector-specific valuation metrics versus generic multiples.
Why do E&P companies trade on PV10 rather than EV/EBITDA, and what does PV10 actually measure?
A technical question on setting recoveries in a restructuring.
How does valuation of a distressed company differ from valuation of a healthy company?
Tests whether a candidate can connect company quality, public-market evidence and an underwriting return.
How would you value a growth-stage software company with $30m of ARR, 60% growth and 115% NRR?
Tests whether you understand the advisory product, not just the analysis behind it.
A board asks its banker for a fairness opinion. What does it actually say, what does it not say, and why is it worth paying for?
Tests judgement about tool selection rather than mechanics.
Name situations where a DCF is the wrong tool, and explain what you would use instead in each case.
Essential for FIG groups; also a common curveball in generalist interviews.
Why can't you value a bank with a standard DCF and EV/EBITDA? Walk me through how you would value one instead.
An upstream coverage case tests whether you can connect commodity hedges to liquidity and valuation without valuing a temporary mark as a permanent asset.
An E&P company has 2027 production of 10 million barrels. It has hedged 60% of that volume with swaps at $75 per barrel. Your base oil deck is $65, while the spot market is $80. How should the hedge book affect your view…
A FIG case uses reserve development to test whether you can distinguish a one-time accounting charge from a signal about underwriting quality and capital capacity.
A P&C insurer reports a 5-point adverse prior-year reserve development charge, taking its combined ratio from 96% to 101%. Management calls the charge isolated and maintains its buyback plan. How would you assess whether…
A power and utilities associate may use this case to test whether a candidate can distinguish headline power prices from an asset's realised economics.
You are valuing a 200 MW merchant solar project. Its expected annual output is 350,400 MWh and the forecast average hub price is $50/MWh. Because solar generation is concentrated in low-price midday hours, the project…
Essential for conglomerates and any company an activist is targeting.
A conglomerate has three divisions in unrelated industries. How would you value it, and why might the sum exceed the market price?
A sell-side healthcare process can test whether you know how a regulatory condition changes both price and deal certainty.
A biotech with one oncology drug is being sold after accelerated approval. The confirmatory trial reads out in 18 months, and the buyer wants to pay a headline price based on full approval. How would you advise the…
A senior coverage interviewer uses this scenario to test whether you can turn customer concentration and AI economics into a defensible valuation recommendation.
An AI-infrastructure vendor has $80m of ARR, 60% growth and an 85% gross margin. Its largest customer supplies 45% of ARR under a one-year contract, and that customer is building a competing internal tool. Comparable…
Common in middle-market M&A and valuation advisory.
How does valuing a private company differ from a public one? What discounts apply and how do you estimate a discount rate without a share price?
Material in restructuring and in acquisitions of loss-making companies.
A target has $500m of NOL carryforwards. How much is that worth to an acquirer, and where does it go in the valuation?
Technology coverage interviewers use this to test whether a candidate can turn a bookings headline into a defensible revenue forecast.
A SaaS company reports 30% growth in total RPO, but only 12% growth in current RPO. Billings are flat, reported ARR grows 18%, and management points to several large three-year contracts signed late in the quarter. What…
Tests whether you understand that valuation depends on who is doing the owning.
A banker values a target at $500m. Your internal analysis says $380m. Both are defensible. Why do they differ?
Write your answer, get it graded on technical accuracy, completeness and communication, and see exactly which mechanic you missed.
Firm names indicate where a question type is commonly reported in interviews. They are not sourced from, endorsed by, or affiliated with the firms named.