Greenhill IB Interview Questions

At 3:15, the minute hand is at 90° and the hour hand has moved to 97.5°, so the angle between them is 7.5°.

Buffett prefers EBIT because depreciation represents real economic consumption of assets requiring future replacement spending, so EBITDA overstates distributable cash; I agree, though EBITDA remains useful for credit analysis when adjusted for maintenance capex.

A Coke-Pepsi deal would produce mostly cost synergies. The savings come from cutting duplicate corporate overhead, merging bottling plants, buying ingredients and packaging in bigger volumes, combining distribution routes, and pooling marketing spend. The plant and route savings depend partly on Coke's franchised bottlers. There would be some revenue synergies too, like selling Pepsi's Frito-Lay snacks through Coke's channels. The big catch is antitrust. The two companies control a very large share of soft drinks, so regulators would likely challenge the deal or demand that the combined company sell major brands.

One Greenhill deal I've followed is Mizuho Financial Group's acquisition of Greenhill & Co. in 2023 for about $550 million in cash, or $15.00 per share. What stood out to me was how a global bank was willing to pay a very large premium to Greenhill's trading price to acquire a capital-light advisory franchise, which says a lot about the strategic value of senior banker relationships and advisory credibility. That said, if you prefer a client mandate, I'm also prepared to discuss a recent transaction where Greenhill advised one of the parties.

EV is unchanged because the increase in debt is offset by an equal increase in cash, leaving net debt the same; WACC likely decreases as more weight shifts to cheaper after-tax debt, unless leverage becomes excessive.

You're looking at whether the deal is accretive or dilutive to American Airlines' EPS, the magnitude and phase-in of revenue and cost synergies, the purchase premium paid, pro forma leverage, and regulatory risk from route overlaps requiring divestitures.

Sources include debt tranches (for example, revolver if drawn, term loans, senior notes, mezzanine), rollover equity or seller financing, excess target cash if it is used to fund the deal, and sponsor equity as the plug. Uses include the equity purchase price paid to shareholders, repayment or refinancing of existing debt, transaction fees, financing fees, and any minimum cash left on the balance sheet.

Before recommending anything, I would gather five things: the client's financial profile (income, assets, debts, current holdings), their objectives and time horizon (what the money is for and when they need it), their risk tolerance (how much loss they are willing to sit through), their risk capacity (how much loss they can afford without derailing their goals), and qualitative constraints such as liquidity needs, taxes, legal restrictions and personal preferences. Together these form an Investment Policy Statement, the written plan that sets the client's asset allocation (the split between stocks, bonds, cash and other assets). The return target follows from these inputs, so it gets set after them.

Common errors include mixing equity value and enterprise value across methodologies, using inconsistent share counts or bridge assumptions, including outlier comps, double-counting control premiums, misaligned axes, stale inputs, and unexplained ordering differences such as precedents screening below trading comps.

Subordination can be established through structural subordination (HoldCo vs. OpCo hierarchy), contractual subordination (explicit agreement in indentures), lien/collateral subordination (first-lien vs. second-lien priority), and payment/waterfall subordination (sequential cash-flow distribution rules).

DCF is my favorite because it values a company based on its intrinsic cash flow generation rather than relative market pricing, making every assumption explicit and auditable — though I always triangulate with comps and precedent transactions.

I'd pitch PepsiCo acquiring Celsius Holdings — it fills PepsiCo's energy drink gap against Coca-Cola/Monster, leverages their existing distribution partnership, and at ~$9–11B is financially manageable and likely accretive within two years.