Bank of America Investment Banking New York Interview Questions | GFC Technical Interview Series

May 27, 2017

Bank of America Merrill Lynch (NYC/Chicago) – Investment Banking Summer Analyst

* First Rounds and Super Day

 

Walk me through a Dividend Discount Model? Explain it as though you are talking to your grandmother?

  • Money today is worth more than money in the future, discount dividends or returns to shareholders by cost of equity/equity investor risk

 

What are the 3 main valuation techniques? Advantages and disadvantages of each technique?

  • Comparables analysis is dependent on market conditions/need to find good comparables to fit target

  • DCF projections can be too optimistic, dependent on WACC and terminal value calculations since they affect the whole model

 

A pitchbook got lost in the mail and your MD needs the material as soon as possible for a client pitch—what do you do?

  • Get alternatives: Send the MD a digital copy and find out printing stations in the area

  • Try to track down the missing package and protect confidentiality and send to the right address

 

How would you calculate multiples for comparable companies analysis?

 

What are the typical multiples for financial sponsor transactions?

  • Around 25x

 

Walk me through a DCF step-by-step, how do you calculate change in net working capital?

 

Walk me through the three main financial statements?

  • Aside from debt and equity raising, what else are in cash flows from financing? Answer can be dividends or share buybacks.

 

What multiples would you look at when assessing the debt or leverage of the company (Leveraged finance)?

  • Debt/EBITDA, Interest Expense/EBITDA, -/UFCF?

 

What do you think about our bank’s position in _______ industry?

 

 

 

 

 

 

 

 

 

 

 

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