Hard Investment Banking Practice Questions

91 free hard-difficulty Investment Banking questions, drawn live from KomFi's calibrated bank. These are the items that separate top scorers — every one carries a full explanation and trap analysis once you sign in.

1. If the tax rate is 25%, and ignoring synergies or write-ups, will the deal be accretive or dilutive?
2. In the 'Sources and Uses' for an LBO, where does the 'Management Rollover' appear, and how does it affect the
3. A company has $100 million in Net Operating Losses (NOLs). In an LBO, how do these NOLs affect the IRR?
4. A PE firm targets a 20% IRR over a 5-year hold. If they expect a 2.5x MOIC, are they meeting their target?
5. In a DCF, if Capex significantly exceeds Depreciation and Amortization (D&A) in the terminal year, what is the
6. What happens to Equity : Value and Enterprise : Value if a company issues $200 million in new debt to repurcha
7. How will Company B's valuation multiples and financial ratios likely differ from Company A's, assuming identic
8. A company switching from LIFO to FIFO inventory accounting during a period of rising prices will report which
9. Compute the Weighted Average Cost of Capital (WACC) given: Risk-Free Rate (r_f) = 4.0%, Beta (β_L) = $1.25, Eq
10. What is the levered beta (β_L)?
11. Which document is the 'teaser' designed to lead to?
12. Calculate the Terminal Value of a company using the Perpetuity Growth Method (PGM) given: Final year projected
13. What is the primary rationale for using the mid-year convention in a DCF analysis?
14. Why is Noncontrolling Interest (NCI) added back in the Enterprise Value bridge?
15. If the buyer's share price drops by 10% before the deal closes, what happens to the value received by the targ
16. If the company capitalizes $20 million of software development costs instead of expensing them, how does this
17. In a SOTP (Sum-of-the-Parts) analysis, if a company's high-growth Tech division is valued at $500 million and
18. Which component of the LBO 'Capital Stack' typically has the lowest cost of capital and the highest priority i
19. What is the primary impact of a 'Dividend Recapitalization' on a financial sponsor's internal rate of return
20. A company has a 'Cash Conversion Cycle' of 60 days. If it manages to reduce its DSO by 5 days and increase its
21. How does the 'Mid-Year Convention' in a DCF impact the Present Value (PV) of cash flows compared to a year-end
22. When unlevering a peer group's beta, an analyst observes that BetaCo has a significantly higher levered beta
23. What is the ROIC?
24. A company has $100 million in Cash on its balance sheet, but… — How should this be treated in the Enterprise V
25. Using the Perpetuity Growth Method with a growth rate (g) of 3.0%, what is the Terminal Value (TV) at the end
26. If the tax rate is 25%, what is the new Goodwill created in the transaction?
27. If the exit multiple remains 8.0x and the company grows EBITDA by 20% while repaying 20% of its initial debt o
28. If Vanguard's share price is $70.00, what is the pro forma EPS, assuming zero synergies or transaction adjustm
29. If the after-tax cost of debt is 6.0%, is the deal accretive or dilutive?
30. If the firm increases its leverage such that the Equity Multiplier becomes 3.0x but Net Profit Margin drops to

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