IB Technicals + Questions

Learning Material:

  1. Investment Banking Industry Overview
  2. Basic Financial Accounting: The 3 Financial Statements
  3. Financial Statement Analysis
  4. Basic Finance
  5. Enterprise Value and Equity Value
  6. Weighted Average Cost of Capital (WACC)
  7. Discounted Cash Flow (DCF) Valuation
  8. Public Comparable Analysis (Public Comps)
  9. Precedents Transactions Analysis
  10. Valuation Summary + Questions
  11. Diluted Shares Outstanding
  12. Accretion and Dilution Analysis + Questions
  13. Intro to Private Equity and LBO
  14. Leveraged Buyout Analysis (LBO) + Questions

Interview Questions Walkthrough:

  1. Accounting Questions

 

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Precendent Transactions Analysis

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Valuation Summary + Questions

3 Main Valuation Methods: DCF Public Comps Precedent Transactions A common interview question will ask you to rank the 3 valuation methods in terms of the highest to lowest valuation yielded. A response to this would be: Generally, precedent transactions would yield the highest valuation because of the control premium and potential synergies that go into an M&A transaction Depending on one's assumptions and the market environment, DCF and Public Comps can be either high or low * Unrelated to the 3 main ones, but LBO is usually the lowest because it is a floor valuation where PE firms can earn their target IRR How to value a private company DCF: FCF projection and Terminal Value calculations are same for public companies But for WACC, private companies don't have an observed equity beta, so you have to use the equity beta from comparable companies in an unlever-relever calculation Public Comps: Apply a discount for the comparable valuation if using publicly traded comps, bec...
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Intro to Private Credit

Intro: TLDR: private credit is any loan that isn't a bond (not publicly traded) and not issued by a bank The non-investment grade credit markets in the US and Europe have expanded threefold in size since the Global Financial Crisis (GFC), growing from $1.7 trillion to $5.1 trillion. Companies in need of debt financing can either turn to banks for a loan—which would then either hold the loan on its balance sheet or syndicate it to a group of similar investors—or they can turn to private credit.  Private Credit: loans provided by lenders other than banks. Private credit funds lend directly to companies, often without using investment banks as an intermediary. They hold the debt and collect interest, rather than sell it off in pieces to other investors like a bank would. While a PE firm buys all or some of a company, private credit firms lend money to a company directly. AKA: In private equity, you are the owner of the business, and when it comes to private credit, you should operate ...
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