Easy Investment Banking Practice Questions

157 free easy-difficulty Investment Banking questions, drawn live from KomFi's calibrated bank. Build the foundation first: these test the core mechanics every harder question assumes.

1. What is the Multiple on Invested Capital (MOIC)?
2. What is the control premium?
3. Which valuation methodology would likely produce the 'floor' valuation for a mature industrial company in a st
4. Which of the following changes, held in isolation, would most likely achieve this?
5. What is the Multiple on Invested Capital (MOIC)?
6. If a company has an Unlevered Free Cash Flow (UFCF) of $500 million in Year 5, a WACC of 10.0%, and a perpetui
7. What is the 3-year Compound Annual Growth Rate (CAGR)?
8. If a company's Net Debt is negative, what is the relationship between its Equity Value and Enterprise Value?
9. What is the Multiple on Invested Capital (MOIC)?
10. Which of the following multiples would be most useful for a capital-structure-neutral comparison?
11. When calculating the WACC, why is the cost of debt multiplied by (1 - t)?
12. An analyst calculates a DCF and determines the Enterprise Va… — What is a potential concern with this result?
13. A company has a $200 million 'Noncontrolling Interest' (NCI)… — Why is this added in the Enterprise Value calc
14. In a merger model, the 'Pro Forma' share count is calculated as:
15. An acquirer with a current P/E multiple of 20.0x is consider… — Without considering synergies, will this deal
16. A target company is being acquired for $60.00 per share. Its… — What is the control premium being paid in this
17. Which buyer is generally able to pay a higher premium in an auction for a mature industrial company, and why?
18. What is the primary impact on the LBO returns?
19. Why is EBITDA often used as the denominator for Enterprise Value multiples, rather than Net Income?
20. Which scenario provides a higher IRR?
21. Which component of an LBO's return is considered the 'least predictable' and is often set to zero in conservat
22. When calculating Enterprise Value using the if-converted method, how is this bond treated?
23. An analyst is calculating the Terminal Value of a company in… — If the WACC is 10.0%, what is the Present Valu
24. A company has $100 million of Preferred Stock with a 6% divi… — When calculating Enterprise Value, why is this
25. What is its Enterprise Value?
26. If the debt remains $600 million at exit, what is the MOIC?
27. In an LBO, if the entry multiple is 8.0x EBITDA and the exit multiple after 5 years is also 8.0x EBITDA, how c
28. What is the Multiple on Invested Capital (MOIC)?
29. If the company generates $12.0 million in Net Income, what is its Return on Equity (ROE)?
30. Assuming no synergies, what is the likely impact on the acquirer's Earnings Per Share (EPS)?

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