Investment Banking Interview question

 Top 25 Interview question for Investment Banking. 

1. What happens to free cash flow if net working capital increases?
2. How can a company raise its stock price?
3. If you were the Chief Financial Officer (CFO) of a Fortune 500 company, what would be your concerns? Explain from a high level what the long-term financial implications are for your company.
4. How would a $10 increase in depreciation expense affect the three financial statements (assuming a 40% tax rate)?
5. Walk me through the Income Statement.
6. What is Enterprise Value?
7. What is WACC and how do you calculate it?
8. What is EBITDA?
9. Would you be calculating enterprise value or equity value when using a multiple based on free cash flow or EBITDA?
10. Can a company have a negative book equity value?
11. What is typical of an LBO (leveraged buyout) transaction?
12. Why would a company issue equity rather than debt to fund its operations?
13. How is it possible for a company to have a positive net income but go bankrupt?
14. What are some ways you can value a company?
15. Which of the valuation methodologies will result in the highest valuation?
16. Why might there be multiple valuations of a single company?
17. Walk me through a DCF.
18. What is the cost of equity?
19. What is an Initial Public Offering (IPO)?
20. What is the difference between accounts receivable and deferred revenue?
21. When calculating enterprise value, do you use the book value or the market value of equity?
22. What is the difference between cash-based accounting and accrual-based accounting?
23. What are the major factors that drive mergers and acquisitions?
24. All else equal, should the WACC be higher for a company with a $100 million market cap, or a company with a $100 billion market cap?
25. How/why do you lever or unlever Beta?