Guide to Investment Banking Duke MBA Finance Club...Prepared by: Arun Krishnan & Preet Chawla Updated By: Daniel Vidal & Marshall Friedman Contributors: Ben Thomason / Dawn Shaw (CMC)

Prepared by:

Arun Krishnan & Preet Chawla

Updated By:

Daniel Vidal & Marshall Friedman

Contributors:

Ben Thomason / Dawn Shaw (CMC) & Hemant Kapoor

Duke MBA Finance Club

Guide to Investment Banking

Table of Contents

1. Investment Banking – Introduction and Structure

2. Key Requisite Skills for Investment Banking

3. Fuqua Academics

4. Timeline to Follow

5. Investment Banking Story

6. Key Events in the Recruiting Timeline

7. Training Opportunities

8. Interview Questions

9. Day in the Life of a Summer Associate

1 Investment Banking – Introduction and Structure

What is Investment Banking?

Investment Banks refers to organizations that do some combination of the following functions:

Provide strategic, financial and valuation advisory services

Raise capital through the issuance of equity, debt, or hybrid securities

Advise companies in merger & acquisition and restructuring deals

Essentially, the bank is an intermediary between those who have money (investors) and those who try

to put it to use (clients/corporations). Some banks also have private client services businesses (helping

wealthy individuals invest) as well as traditional asset management businesses.

Structure of Investment Banks:

As illustrated below, investment banks span a variety of businesses including fixed income, equities and

private client services in addition to traditional investment banking. For the purpose of this guide, we

focus on the vertical below ―investment banking.

Investment banking groups typically have industry groups, product groups, or some combination of

both. All banks are not the same so it is important that you understand the difference between them

(See “Bank Overviews” below).

Industry groups cover, you guessed it, industries. Most large investment banks will cover virtually all

industries in one capacity or another. For instance, some may have a dedicated Aerospace & Defense

industry group while another bank will consolidate this group into General industrials – again, it is

important you understand the group structure before you interview.

Investment Bank

Investment Banking

Fixed Income EquitiesPrivate Client

Services

Industry Groups

Product Groups

Geographic Groups

Sales

Trading

Research

Product groups, conversely, typically include the following:

Equity Capital Markets (“ECM”) – This group has a focus on any transaction relating to equity

securities, for instance initial public offerings.

Debt Capital Markets (“DCM”) – This group focuses on investment grade debt related

transactions such as issuances. DCM is also an important group supporting the various industry

groups as many M&A and strategic transactions involve a debt component.

Leveraged Finance (“LevFin”) – Leveraged finance provides the same services as DCM except for

non-investment grade debt; which primarily consists of high yield bonds and term loans.

Mergers & Acquisitions (“M&A”) – This group focuses on the buying and selling corporate

entities or assets. Most bulge bracket banks have independent M&A groups although it is not

uncommon to find a bank where each individual group handles M&A independently.

Additionally, boutique investment banks typically focus exclusively on M&A and in fact often

specialize in buy-side or sell-side M&A

o Buy Side M&A: As a buy-side M&A advisor you help your client make acquisitions. The

buy-side process is more analytical and involves a tremendous amount of due diligence

and game theory as you navigate your way through an auction held by the sell-side

investment bank. It is important you properly evaluate your target, understand the risks

and trends, and identify a purchase price just high enough to win the deal but not

overpay. Meanwhile, you need to also figure out how to pay for it (Hint: Call your

friends at Leveraged Finance). The biggest downside of buy-side M&A is that the

investment bank only earns a fee if you win the bid.

o Sell Side M&A: As a sell-side M&A advisor you help your client make a sale. In contrast

to buy-side M&A, you will earn a fee as long as you find a seller. The process as a sell-

side advisor is different, where the primary focus is to manage the sales process. You

identify potential buyers, manage the due diligence data room and evaluate the offers

to ensure your client receives the greatest value in the transaction (remember,

transactions are not always executed in cash, hence the―value‖ emphasis).

2 Key Requisite Skills for Investment Banking What do recruiters look for in an investment banker?

Desired Characteristics Opportunities to demonstrate

Industry knowledge Knowledgeable of finance and industry

Excited by the work

Understands differences in the companies’ and groups’ cultures

Finance Symposium

Corporate Presentations

Week on Wall Street

Informational/Behavioral Interviews

Interpersonal Strong fit with the company culture

Passes the “airport test”

Demonstrated professional excellence

Networking events

Resume

Previous awards/recognition

Informational/Behavioral Interviews

History of delivering results

Experience in driving change

Analytical Grasp of finance and accounting

Basic valuation knowledge

Problem solving skills

GMAT scores, GPA and other degrees

Technical interviews

Market interrelationships

Management Handles stressful situations

Manages team effectively

Clear future career goals

Leadership demonstration

Composure during interviews

3 Fuqua Academics In this section, we hope to provide you with some guidance on classes.

Core work

1. Accounting (Fall 1) – If you have never taken accounting, this class is one where you should put

in considerable effort as it will be crucial for recruiting. Not only will banks ask for your

accounting grades, a lot of the concepts tested in interviews are accounting related. It’s highly

recommended you prioritize this class in terms of the time invested.

2. Probability and Statistics (Fall 1) – Some banks will ask for your grade in this class. While getting

a P is not a deal breaker, it does not send the right message about your abilities and you may be

tested more quantitatively in interviews.

3. Finance (Fall 1 or Fall 2) – Since Investment Banking is a subset of finance, it is quite obvious that

this class is important. If you exempt a core class, you can take Finance during Fall 1. Otherwise

it is offered in fall 2. Perhaps the most important concept from the class is that of NPV.

Exemptions

It is highly recommended to exempt as many classes as possible. This enables you to take some electives

that are very beneficial from a recruiting standpoint. Look below for a list of electives. Moreover, you

paid a lot of money to come to Fuqua, try to maximize your learning. Even if you’re unsure of how much

you know, take the exemption exam and if you pass, take electives that will benefit you in getting more

knowledgeable. One concern for some of us is – well wouldn’t I miss out on bonding with my team?

There is plenty of time to bond with the team in other classes.

Electives

There are a few accounting and finance electives you can take before your interviews. We have listed

them below in order of priority.

1. Corporate Finance (Fall 2) – Taught by John Graham, this is a key class from a recruiting

standpoint. There will be plenty of questions in interviews on capital structure and if you are

able to exempt a class, this should be first on your list of electives. Most of us who took this

class found it very useful to preparing for interviews.

2. Financial Statement Analysis (Fall 1) – If you exempt two classes, we highly recommend you take

this class as it teaches you about the financial statements and modelling in depth. These are

concepts very relevant to banking and there are great takeaways from this class.

3. Corporate Financial reporting (Fall 1) – If you exempt three classes, this class is worth adding to

your schedule. It teaches important concepts of accounting and builds upon several concepts

from core. You learn to analyze the footnotes of a 10-K which is very useful.

4 Timeline to follow: The recruitment process for investment banking starts early and ends earlier than most others. Review

the timeline below and plan accordingly:

Breakup of the above timeline:

August

o Learn about the recruiting process as a whole, best practices, resume advice etc. Use the 30

minute CMC check in to discuss your story and get an understanding of the various recruiting

tracks available at Fuqua. International students can use this time to acclimate to the professional

environment in the US – start reading WSJ, familiarity with the M&A/transaction space etc.

September

o Finance Career Intensive – 1st week of September – a session on the various opportunities

available in the Finance space.

o Finance Symposium – 3rd week of September

o CMC sponsored events – resume review, LAMP list

o Career fellow program

October

o Corporate presentations on campus – The Fuqua recruiting team from each bank will come to

Fuqua and help you learn more about their bank

o Week on Wall Street (Over Fall Break – last week of October)

Travel to NYC to meet investments banks

Also a good time to schedule informational interviews if you feel adequately prepared and

confident. However, be mindful of the Week on Wall Street schedule for bank presentations as

these are mandatory events

Sep Oct Nov Dec Jan

Corporate presentations

Informational interviews

Closed lists Interviews

WOW

Closed list dinners

November

o Informational interviews – travel to NYC to meet bankers one-on-one

o Also reach out to banks/companies on your LAMP list that do not recruit on campus. This is

important as a backup option in case on-campus recruiting does not work out

o Invite only pre-closed dinners hosted in Durham

December

o Resume drops

o Closed lists released

o Finance Club – mock interviews

o Continue reaching out to companies on your LAMP list

January

o On campus interviews – normally the 1st and 2nd week of January

o Continue reaching out to companies on your LAMP list

February - May

o Interviews continue – Not everybody gets a job right away – interviews continue especially for

boutique investment banks. Keep monitoring CMC job postings – it is not uncommon at all for

banks to post opportunities through the spring.

o Continue reaching out to companies on your LAMP list

5 Investment Banking Story For almost every bank, this will be the first question that you will be asked during interviews and even

the informational process. There have been a few times this was asked during corporate presentations

and Week on Wall Street as well. Banks ask this question to understand whether you really want to do

banking or not. The most important thing is to be thoughtful in how you approach your answer.

Recommendations for your answer:

1. Try to keep your why investment banking story to about a minute. Bankers have short attention

spans and you want to be as succinct and to the point as possible.

2. Have three solid points as to why you want to do banking and expand upon them. There’s no

hard and fast rule here but “the rule of three” is used by most candidates.

3. Highlight transferrable skills. What you did before coming to Fuqua is relevant no matter what

you did. Understand what it takes to be a good banker and talk about some of you experiences

in the past to tie it to banking. Some skills that successful bankers have are attention to detail,

team oriented, leadership, client service orientation, ability to work in a fast paced environment,

driven, can work long hours and in a stressful environment. There are several more skills that

have been left out but the key is to tie your experiences and skill from the past to them.

4. Do not mention money or working hard. These are cliché and it makes it seem like you gave no

thought. You can mention that you are ok with the hours in another context.

5. Try to keep your story succinct. If you are highlighting a point that you like to work on deals, be

to the point about it and do not go off on tangents. You want to get the most bang for your buck

out of every word you say. There’s only a few minutes to make an impression and you want your

story to be as powerful as possible.

6. Practice your story with your peers and run it by SY’s during the September-October period to

refine it as much as possible. Get started early. Most of us found ourselves constantly updating

our stories all the way through December.

No matter how good you think your story is, you are going to get caught off guard by bankers. This is

true especially if you come from consulting or asset management backgrounds. In the past, there have

been cases where people have interned at investment banks and then gone back to consulting or asset

management. Banks invest quite a lot of resources into the internship program with the hopes of finding

full time bankers and it’s in their best interest to ensure only those people are coming into the

internship program who are serious about it and plan on returning full time. This can make it challenging

for people from certain backgrounds. That is where the “Why Investment Banking” question becomes

very important and it is essential you communicate the right things to the bank.

Below you will find sample stories. The point here is not to copy these stories because banks will read

through this. However, having what a decent story entails may help you form your own story. There

certainly can be overlaps but you have to highlight your personal experience.

Sample Story (Asset Management Background)

I want to pursue investment banking because I want to help firms create value. While I quite enjoyed my

last job assessing long/short hedge funds, instead of just assessing value, I wanted to be part of the

value creation process. This was because it is tangible and I can see the impact of my work. Moreover, I

see more of an edge using my knowledge of capital structure advising companies as opposed to

researching publicly available information. Secondly, I like the fast paced nature of investment banking.

At my past job, I added 12 investments to the portfolio over the three years I was there. Most of the

work was monitoring funds in the portfolio. I want to be in an environment that is constantly changing

and there are always clients to cater to. Lastly, I want to be an investment banker because I want the

client focus. I conducted a few quarterly calls for the long/short strategy and really enjoyed it. I viewed it

as one of my strengths and quite enjoyed dealing with clients in the limited exposure I got. In the long

term, banking provides me with the level of client exposure that I would enjoy.

Sample Story (International Background)

Given my professional and academic background, I really enjoy working on transactions and tracking

financial markets to get an overall perspective. As part of a Big-4’s corporate finance team, I worked on

transactions across sectors ranging from automotive, healthcare, capital goods to other manufacturing

industries. I intend to apply my quantitative and analytical abilities in a broader setting than just

valuation. Valuing deals made me comfortable with financial modelling, evaluating transaction scenarios

and analyzing sensitivities and value drivers. Investment banking would help me use these skills in a

more challenging environment as part of deal teams, enable me to handle the entire deal making

process from inception to consummation and have a broader impact on clients.

[Also, depending on where you are from, weave in why investment banking in the US as against pursuing

it in your home country]

6 Key Events in the Recruiting Timeline Corporate Presentations

Around late September and early October firms, most firms will visit to make presentations. The

presentations themselves are short and are intended to give you an overview of the firm and its unique

position in the marketplace. After the presentation, bankers will talk to you and answer questions you

may have. This is the first impression you’ll make and it’s important to start out right. Almost no one

comes out “ahead” in a corporate presentation but there are certain people who make bad impressions

and this is usually hard to recover from.

Ask questions about people’s backgrounds and why they chose a certain bank and group. Keep it more

casual if possible. They are trying to get to know you better. It’s also a chance for you to know what kind

of people you would be working with at each bank. I have heard discussions around the Fuqua

experience of bankers, how their favorite football team was doing, what kind of food they like, where

they chose to live, where they like to eat and where they travelled.

Do not ask why one bank is better than another bank. Also try avoiding clichéd questions like formal and

informal mentorship programs. You can ask SY’s these questions if you really want to know. Use your

judgment in what you think is a good question. It’s always better to be natural and flowing but it’s

understandable that those who haven’t networked before may find this a bit daunting and want to

prepare questions as a result. That is totally understandable but try to sound as less pre-rehearsed as

possible. Also, in the spirit of Team Fuqua, please give everyone a chance to speak and do not hog

conversations. It’s really unfair to your classmates and it doesn’t set a good impression with the bankers.

Getting ready for Week on Wall Street

Revisit your notes from company presentations

Know the broad structure of the summer internship program at various banks – rotation vs

generalist vs direct placement into groups

If you feel ready enough, schedule informational interviews during this week. However, be mindful

of the schedule of bank presentations during the week as these are mandatory events

Be on time for each of the bank presentation

Follow the SIP circle recommended practices while networking during these presentations as well

Have a well outlined personal story/30 sec pitch by the time WOW commences

Also, plan for further trips to New York by the time WOW comes around. The 2 weeks immediately

after WOW are crucial to get in as many informational interviews as possible

Getting ready for Informational Interviews

Be prepared to talk about markets and various major issues/topics in the finance world. Have an

opinion on these topics. Your views need not be the right one but the objective is to demonstrate

your thought process

Be prepared for questions like why investment banking, why that specific bank, why not some other

career option etc

You may get asked technical questions in finance/accounting in some informational interviews.

Hence being up to date with core finance and accounting may help and self-initiated learning for

other topics is also advisable

Ensure that you manage your schedule well and are on time for each of your appointment

Have ample questions prepared ahead of time – e.g. for a 30 min interview, have 1 hour worth

questions, have different questions for each banker

Know the bank’s industry/product group set up

Be respectful of their time – do not run over the time limit

Allow buffer time in your schedule

o Typically meet with 3 people for a half hour each

o Could be asked to stay and see more people (beyond what was initially scheduled)

Always send a thank you email after your meetings

Other general advice for informational interviews

CONTROL THE CONVERSATION

Try to make it conversational and build off of what they are saying rather than a rapid fire Q&A

Make a good impression

Goal is to learn about the bank but also to get support from people at banks

Typically associate level / Fuqua grads but COULD get higher level people

KNOW your resume, they will have it and ask you questions about your bullets

Bring a pad folio and copies of your resumes

Refer to presentations / events (shows you are paying attention and invested)

Also, refer to the Fuqua Informational Interview Guide to help you with sample questions, process to be

followed etc (will be circulated as part of Finance Club activities).

Invite Only Dinners

Before closed lists come out, dinners will be held in Durham where firms get another chance to get to

know you better. It’s a very casual setting as one might expect. Do not drink too much alcohol (sorry to

state the obvious). There will be several people around you trying to talk to the same banker, so give

everyone a chance to speak. It reflects well on you and is fair to your classmates. Be careful with your

words and do not criticize anyone. Do not try to show off your knowledge. Show that you are a person

that people would like to work with. That’s the whole point of the dinner.

7 Training Opportunities Training the Street and Pillars of Wall Street (‘Training Firms’) are professional training firms that teach

the basics of financial modeling to Analysts and Associates at almost all major Investment Banks. There

are typically two or three sessions held over the Fall and Spring terms. The first session deals with

Valuation, and provides you a quick overview of the different type of valuation techniques – Multiples,

DCF (Intrinsic), LBO as well as Accretion and Dilution analysis. The second session equips you with a first-

hand look on complex leveraged buyouts, merger consequence analysis and earnings model

computations. These different training sessions are beneficial to students in the following ways:

First-hand modeling experience: The guided session allows students a hands-on experience while

dealing with complex financial models that are used in a finance professional’s daily life. Training Firms

provide excel templates before the session and works through solving the complex valuation models in

the guided session. The worksheets that are created in the session remain with students and can

become a valuable source of information in the future.

Easy-to-understand documents: Training Firms provide hard-copy documents to every registered

student that quickly becomes an essential guide while preparing for finance interviews. These step-by-

step instructions are easy to understand and are a must for all interview preparation.

Tools to improve you’re Excel skills: Training Firms provided students proprietary Excel tools that allow

students to quickly transform home-build valuation models to industry standard valuations. These tools

help improve your speed and accuracy, while constructing excel models.

Resume Builder: Last and definitely not the least, Training Firms is well respected in the industry. By

attending the sessions in the Fall, interviews quickly become aware that the candidate is indeed serious

about pursuing a career in finance. It can help establish a talking point with junior associates and can

form a vital bridge in succeeding in challenging interviews.

These sessions are definitely recommended. For undecided students who are considering a career in

Finance, these sessions provide an overview of what work finance professionals are asked to perform on

a daily basis. These sessions are valuable, but are a test of your resolve to succeed in the industry. The

sessions move at a much faster pace than classes and are typically an all-day Saturday affair.

8 Interview questions I. Bank of America Merrill Lynch

Behavioral

Tell me about an instance where you failed and what was your learning out of it?

How will you come up to speed in an intense client facing business like investment banking?

Where do you see yourself in 5 years?

What do you think your relationship with analysts will be?

What were your grades in Accounting, Finance, and Stats?

You have had a lot of success. Why would you want to leave that and go into banking?

Walk me through your resume starting with most recent experience and work backwards.

What are your strengths and weaknesses?

Technical

What is reasonable leverage in today's markets?

Discuss the High Yield markets. [Interest in Lev Fin]?

Discuss the European Debt Crisis. What do you think caused it and how do you think it should

be resolved?

Discuss the Leveraged Loan markets. [Interest in Lev Fin]?

Which stocks are you following? What do you think about the markets?

I have equity of $600 and that is 40% of my capital structure. How much debt do I have?

(assuming only debt and equity)?

Which ratios are used to evaluate a company? A higher P/E company buys a lower P/E

company, is it accretive/dilutive? Why?

Walk me through an LBO model.

Walk me through a DCF model.

How does a dividend flow through the 3 financial statements?

How does a dividend recapitalization flow through the 3 financial statements? (Issue debt to

pay dividend)

How does increase / decrease in accounts receivable affects the 3 financial statements? Where

do you find Free Cash Flow in them?

Walk through a recent sponsor deal that you are following (interest in sponsors group, but

other folks got the same question)

McDonalds sold $5 of stuff. COGS 50%. No Tax. Walk me through the impact on the 3 financial

statements.

Client, let’s say a telecom company comes to you to underwrite a debt. What are the things

you'd consider?

How would you value a restaurant business?

What happens to Depreciation and Capex in final projection year of DCF?

Pitch me a stock.

What else can you add to CAPM to account for additional risk?

What is Adjusted Present Value?

If I were running a company, would I want to use debt or equity to buy an asset?

Loan Options: Revolver, Secured Notes, Bank Loan, and Convertible Debt. Rate according to

cost of funding.

Pros and Cons of Exit Multiple and Gordon Growth Method for calculating Terminal Value?

II. Royal Bank of Canada

Behavioral

When was a time you served as leader while at Duke? Tell us about it?

What has been your favorite class? Why?

Can you give an example when you conflicted with a senior person at work?

What do you do for fun?

Technical

$100 Depreciable asset, 50% cash, 50% debt, 40% tax rate, 5 year life - walk through 3 financial

statements

If I buy an asset for X and finance it using debt and equity, how does that affect the 3 financial

statements in time 0 and time 1?

Given share count, share price, EBITDA Margin, and Revenue. Calculate Enterprise Value and EV

Ratios

What is a recent article in the WSJ that you found interesting?

In a football field presentation, how you present the information to the client. What is the

value that you want him to focus on?

III. Deutsche Bank

Behavioral

Why Deutsche Bank?

What sets you apart from everyone else?

Resume Walk Through?

Tell me about the role of an associate?

Where does DB stack up on your list of interviews?

Where do you see yourself after your internship?

How has Duke been? Anything interesting in the last 6 months?

Technical

Talk about various valuation techniques and how they stack up?

Walk me through a DCF high level, discuss exit multiples and what is preferred?

Given share count, share price, EBITDA Margin, and Revenue. Calculate Enterprise Value and EV

Ratios. Info about minority interest, debt and cash was added and the above questions were

repeated?

What is Liquidation Analysis? Is it a below or above the offer price

IV. Morgan Stanley

Behavioral

What would your ILE team say about you? What would the Professors have to say about you?

What do you do for fun and why do you like that activity?

How you would approach an industry you had never worked on before? Walk us through your

process of analyzing this industry.

What is your greatest failure?

Who is going to win the bowl games coming up and why? [College football was an interest on

my resume]?

Walk me through your resume?

Where do you see yourself in 5 years?

Sell me on why we should pick you?

After your summer internship, what are some of the things that would stand out about you?

What stands out about you compared to your peers?

Why Morgan Stanley?

Why investment banking?

Is there anything else that we didn’t cover that you want to cover or say?

Do you have any questions for me?

What is your biggest accomplishment at your most recent job?

Is New York your first choice or are you looking to work in a different city?

Did you have a time in your previous job in which you had to make a quick decision and you

were under pressure?

Explain the role of an associate from your perspective?

Would a Managing Director view the role of an associate differently than you do?

How would you resolve a conflict with a difficult VP/MD? Give me an example where you have

done this in your past?

What are some things that still make you nervous about becoming an investment banker?

Walk me through your role on a previous consulting project (interviewer picked a project from

my resume)?

What skillsets do you have that will make you successful as a banker?

If an MD called you up Friday night before he gets on a plane and asks you to do something and

to use a specific analyst that has plans to go to the Hamptons with his girlfriend for the

weekend which was planned months in advance, what would you do?

What do you like to do in your spare time?

If we were to give you an offer, how long would it take for you to accept it?

My crossover keeps getting stolen in pick-up basketball games at the YMCA why might that be?

(basketball on resume)

Technical

What assumptions in a DCF model are most critical to the model's output? Why?

Walk me through an accretion/dilution analysis for an all-cash deal? All-debt? All-stock?

If Depreciation increases $100, how does that affect all three financial statements?

Discuss the differences b/w all-stock, all-cash, and all-debt to finance a transaction?

Walk me through a DCF high level what are the important assumptions?

Which Terminal Value method do you think is better?

Walk me through an LBO. Why does it give you the lowest valuation?

Is increasing your exit multiple by 50% viable?

How would you value a company, what are the different ways?

Show me on a chart if a firm uses 100% equity and how adding debt will effect WACC?

How do you calculate WACC?

I'm considering selling a business that I own. What should I consider?

Why would a valuation using an LBO model typically yield a lower valuation than a DCF?

Depreciation increase $10 / 30% Tax rate. What happens to the 3 financial statements through

financial statements?

Purchase $100 asset with 50 cash, 25 equity, 25 debt. What happens to the 3 financial

statements at time 0?

A company with a higher P/E acquires another with a lower P/E. Is the impact of EPS accretive

or dilutive?

How would you value a company?

Which valuation method yields the highest value? Why?

You're advising a PE client. Tell him what he should do with his investment if he wants to exit?

Depreciation goes up $100. Walk through the changes to the 3 financial statements.

Walk me through a DCF. What elements effect the DCF the most?

What changes/legislation would you suggest Washington make in order to improve/fix the

fiscal cliff scenario?

V. Goldman Sachs

Behavioral

Why do you want to work in banking? Followed up with OK but that sounds like a lot of

other industries, name two more reasons.

What would your ILE team say about you? Followed up with, what bad thing would your ILE

team say about you?

Technical

If gold is $1000 and you knew it would be $2000 in one year, how would you invest money?

How do you capitalize an operating lease? Why would you do this?

What do you think about the economy in 2014?

Company A offers to buy Company B for $50 per share. Prior to the announcement, the

stock was at $20. After, the stock jumps to $48, why? If the stocks trades at $54, what

would the reasons be?

You write down a machine for $80, walk me through the 3 financial statements.

How does QE affect GDP growth?

What is deferred revenue? What's the implication on financial statements?

A 14x P/E Co buys a 10x P/E Co, is it accretive or dilutive? Followed up by if the transaction

is funded using 100% stock/cash/debt.

You have a football jersey store, selling jerseys for $100 on credit, don't pay taxes this year,

tax rate is 40%. Walk me through the financial statements.

How can you determine if an acquisition is accretive/dilutive? --> Need to ask how the

purchase is being made. They said all stock. Followed up with how does this change in all

debt and all cash?

What global economy would you invest in? Give me two reasons why you're right.

Immediately followed by now give me a reason why you're wrong.

This was the day after the market rallied big post fiscal-cliff. Explain why the market rallied.

You're starting a hedge fund; how would you allocate the money?

What's your outlook on the US and global economy for 2013?

3 financial statements walkthrough in which you don't settle your taxes so you have a taxes

payable at the end of the year

If you know your cost of debt and the P/E multiple of a company, how would you discuss

the best way to fund an acquisition?

VI. Credit Suisse

Behavioral

Have you worked in teams? What do you bring to the table?

Given that you have 1 hour to work on something I assigned to you, how would you best

spend that time.

What are the challenges you faced and overcame while dealing with teams?

How does your team describe you?

What’s unique about you that would allow you to perform well in this industry?

Tell me about a time you had to take initiative.

What were you thinking about as you walked in?

What do you like to do in your free time?

Tell me what about your experiences demonstrates your creativity.

Tell me about a time you were under significant pressure. How did you stay organized?

Tell me about a time you had to lead a team. What was your leadership style?

What would your ILE team say about you?

What has been the most difficult thing about your first year at Fuqua?

What are the metrics by which you analyzed banks coming into the recruiting process?

Tell me about a time you were assigned a complicated task. How did you delegate

responsibility?

Technical

What do you think about the markets right now?

Walk me through the most commonly used valuation methods

How would you think about which option to choose for buying a second hand car: a car

loan with 0% financing and lease (that has monthly payments)?

What are the valuation metrics that you would use knowing that you have only 15

minutes?

How do you come up with unlevered net income? What would happen if days outstanding

increased?

What is the most important statement that you would look at? Follow up: What happens if

net working capital is increasing?

What were the key drivers of your model? What were the industry risks? (referring to 3

statement model on resume)

Car Purchase: Offered you 0% financing or $2500 discount but w/ having to pay interest, which would you choose?

If you were selling a piece of your company, would you prefer cash or equity?

I have a bunch of money and have to invest in Asia. What would you recommend to me?

What stock would you buy and what would you short & why?

What type of role do you play on teams? Tell me about an experience with your ILE team.

VII. JP Morgan

Behavioral

Give me an investment idea in [industry in which you worked].

What did you get in Accounting & Finance?

What was your hardest class?

If given a job, what groups are you interested in and why?

What is your greatest achievement and why?

Talk me through a deal. What would you do differently and why?

Give me 3 strengths and 2 weaknesses.

Technical

How do you think about valuing a company? What would you tell the board? How would

the debt markets respond to that company issuing new debt?

Tell me about a company and how you'd think about their cost of capital.

Give me an investment idea in [industry in which you worked].

Walk me from Revenue to Net Income. Follow-up, would you use an Enterprise Value or

Equity Value Multiple w/ Net Income?

What is a swap? Why would someone use a swap? Name three types of swaps. What types

of industries would use them?

Accretion / Dilution in all cash? all debt? all stock? High P/E company acquires a Low P/E

company...accretive or dilutive?

How would you value a private company?

If I had a company with a P/E ratio of 20x, how could I compare the cost of equity to cost of

debt or cash?

If I had $10M for you to invest, where would you invest it and why?

What industries are you interested in? What are the multiples of those industries?

What industry is of interest to you? How does that industry make money?

VIII. Barclays

Behavioral

"Name, in order of preference, the banks you are interviewing with."

How would you advise Washington to fix the debt ceiling?

What government programs would you cut?

Tell me about a deal you like, are following, and whether I should invest in one of the

companies.

Who have you met with most at our bank?

Why Barclays and who have you met with here?

Give me an example of a time when you experienced conflict in a team. What did you do

to resolve it?

Give me an example of an informal leadership role you've taken.

Who do you have second round interviews with?

Name 1 personal goal and 1 professional short term goal? Long term goal?

Where does Barclays stack up on your list of banks?

When have you encountered a team conflict in your past experience and how did you

handle it?

What is your greatest accomplishment?

Technical

What stock would you go long/short

How do you compare the valuation of 2 different bonds?

How do you value a company?

Walk me through a DCF model.

I have a hardware store that I need to divest. Walk me through my considerations and why

the rationale behind those considerations.

Give me investment ideas. Do you have any sectors you'd short?

Describe the Euro crisis. How would you resolve it? What do you think would happen?

What’s a decent leverage number for Chipotle?

If you had $500k to invest, where would you invest and why?

Barclays also has a case which will cover accounting questions as well as valuation of the

business. Below are cases from the past few years.

CASE 2013

Instructions 30 mins to complete.

2min Company Overview

Company is a package delivery company that ships goods around the world both by trucks and planes.

Trends What trends would you expect this company to face in the current global economy?

Balance Sheet / Income Statement

We were given a balance sheet with 5 yr historical and a 5 yr projection and were asked at specific points if debt was set to mature next year and whether the company planned to refinance the debt or pay with cash. The company refinanced, and they also asked if the new debt had a higher or lower interest rate. Also were asked if dividends had been paid.

Valuation

Given blinded comparable companies (A, B, C, etc.) and their multiples and were asked questions about what we thought would be an appropriate multiple for our company?

Also asked which company we thought our company would acquire and why?

Also used the multiples section to ask if our company was acquired by one of the comps whether it would be accretive or dilutive?

CASE 2014

Instructions 30 mins to complete

2min Company Overview

Health food, value based grocery chain, achieving growth through expansion

Trends

What economic trends affect this company?

How could this company continue to grow revenue?

What are ways this company can control cost?

Balance Sheet / Income Statement

In year XXXX how much did this company pay out in dividends and how was it financed?

How do you calculate net working capital?

Which year did this company have a better rate on its debt?

Valuation

Tell me about the comparables? Do any not belong?

What type of multiple would you use?

What is the value of the firm based on this multiple?

IX. Citi

Behavioral

How will your teammates describe you? How will your friends describe you?

Have you ever dealt with a difficult client? What did you do?

Besides banking, have you considered other career options?

Technical

What's DTA/DTL?

Depreciation goes up by 100, walk me through the 3 financial statements.

Purchase $50 of inventory. Walk me through the 3 financial statements at time 0. At the end of

the year you sell half your inventory, walk me through the financial statements.

9 Day in the life of a Summer Associate 9AM: Get to the office and grab some breakfast. Unless there is something urgent, catch up on

news and wait for the associates to roll in.

10AM: Action picks up and there are several requests on the live deal that need to be completed

very quickly.

12PM: The next turn on another project I work on comes back from the VP and should be finished

within an hour. The day starts looking very hectic.

3PM: Now finally some down time and there’s a chance to hit the gym. Oh wait but a summer

associate needs to make a good impression, so sit and wait to see if anything comes up.

6PM: Work starts to pick back up again and just got another turn. This one needs to be finished

very quickly so that the associate can give it another look and send it off for printing.

7PM: It’s time to order food but there’s not much time to see what choices I have. I order

something healthy and when it comes, eat at the center table with everyone else.

9PM: Now we are on the last turn and it’s time to work as fast as possible.

1AM-4AM: Time to go home. You always hope it’s on the earlier side but realize it’s not often the

case.

It’s important to keep in mind that each group has different hours. Some groups have longer hours

than others. The work can also peak at certain times of the month and is highly variable depending

on deal flow.