Centerview Partners IB Interview Questions

Set NPV of all cash flows equal to zero and solve for the discount rate r by trial-and-error and linear interpolation; in the example, investing $100M and receiving $10M–$100M over four years yields an IRR of approximately 15.3%.

The sun would rise in the West, since reversing Earth's axial rotation reverses the apparent motion of the sky, and the reversed orbit does not override this effect.

I find Dayforce (DAY) interesting — a roughly mid-cap HCM software company benefiting from the ongoing shift from on-premise HR and payroll systems to cloud-based platforms. What stands out is its recurring revenue model, improving profitability as it scales, and the potential for margin expansion over time. I also think it is worth watching relative to peers like Workday, although I would be careful to frame valuation on a specific metric such as EV / Revenue or EV / EBITDA rather than just saying it trades at a discount.

DCF captures intrinsic value but is highly sensitive to assumptions; comps are market-based and quick but reflect no control premium and depend on market conditions; precedent transactions include control premiums but suffer from stale, noisy data.

Free cash flow increases by 100 × the tax rate because depreciation is a non-cash expense that is fully added back, and the only real cash impact is the tax savings (depreciation tax shield).

Start with EBITDA, subtract taxes on EBIT (EBIT × tax rate) to remove the interest tax shield, subtract CapEx, subtract increases in net working capital, and add back any other non-cash adjustments to arrive at unlevered free cash flow.

Use a probability-adjusted bottoms-up build: size the patient population, estimate peak revenue per drug, apply an S-curve launch ramp, probability-weight by each candidate's clinical-stage success rate, and sum across the pipeline.

Holding the $10 stock price constant, EPS rises ~21% (scaling by 0.85/0.70), so the P/E compresses from 15x to approximately 12.4x; in practice, the market would likely reprice the stock upward, keeping the multiple closer to 15x.

An M&A deal is accretive when it raises the acquirer's earnings per share (EPS). EPS is net income divided by shares outstanding, so the deal is accretive when the combined company's EPS comes out higher than the buyer's EPS on its own. That happens when the target's earnings yield beats the after-tax cost of the money used to buy it, before synergies and deal adjustments such as extra depreciation from asset write-ups. Earnings yield is the target's net income divided by the price paid: the inverse of the purchase P/E, or price-to-earnings ratio. The cost of the money depends on the source. Cash costs the interest it would have earned. New debt costs its after-tax interest. New shares cost the acquirer's own earnings yield. A low purchase P/E, cheap financing and synergies (cost savings or extra revenue from combining the two companies) all push a deal toward accretion.

Capital One's ~$35B all-stock acquisition of Discover Financial is one of the strongest acquirer deals announced this year because management guided to roughly $2.7B of run-rate synergies from combining the card businesses and routing more volume over Discover's proprietary network, which goes a long way toward justifying the premium, with mid-teens EPS accretion targeted by Year 3.

Analyze revenue growth trajectory, gross margin trends versus industry benchmarks, R&D and SG&A as percentages of revenue for operating leverage, and bridge gross margin to EBIT margin to identify whether margin movement is cost-structure-driven or growth-investment-driven.

I'd DCF the tree's finite-life apple cash flows—ramping up, plateauing at maturity, then declining—discounted at a rate reflecting agricultural risks like weather and disease, with no terminal perpetuity since the tree eventually dies, then triangulate with comparable sales and replacement cost.