Tell me four reasons a company would trade at a higher P/E than another company.

A company trades at a higher P/E due to (1) higher expected earnings growth, (2) lower risk or cost of equity, (3) a higher payout ratio, or (4) temporarily depressed current earnings deflating the denominator.

Tell me about a company you find interesting.

Pick one company, then walk through what it does and how it makes money, why the business model is compelling, its financial profile, how it's valued versus peers, and a specific catalyst plus key risk.

Why do you subtract the change in Working Capital when calculating Free Cash Flow to the Firm (FCFF)?

Because NOPAT is an accrual measure, and an increase in net working capital means cash was tied up in operations (e.g., uncollected receivables or inventory buildup) that the income statement doesn't reflect, so you subtract it to convert accrual profits into actual cash.

Company A has EV/EBITDA 8x, EBITDA 200, leverage ratio 3x, and 100 shares outstanding. Company B has EV/EBITDA 6x, EBITDA 100, leverage ratio 4x, and 50 shares outstanding. If Company A buys Company B in an all-stock deal and pays 7x EBITDA, what is the price per share?

The price per share is $6.00, calculated as the deal equity value of Company B [(7 × $100 EBITDA) − $400 debt = $300] divided by its 50 shares outstanding.

Suppose you have a company that is generating $50mm in EBITDA and trades at 4x. It has $100mm in senior debt and $200mm in junior debt. What is the equity value? What do you think the debt is trading at? Why?

Equity value is zero since the $200mm TEV cannot cover $300mm in total debt; senior debt trades at par (fully covered), while junior debt—the fulcrum security—trades around 50 cents on the dollar.

If you are evaluating a software company as an investment, what are the two metrics you would pay most attention to?

Net Dollar Retention (NDR) and ARR Growth Rate — NDR reveals the quality and durability of growth from existing customers, while ARR growth captures the overall magnitude of top-line scaling, together distinguishing compounding businesses from leaky buckets.

What is bond duration?

Bond duration is the present-value-weighted average time to receive a bond's cash flows. Macaulay duration measures that weighted-average time, while modified duration converts it into an approximate measure of the bond's percentage price sensitivity to a small change in yield.

A company issues $100 of equity and uses the proceeds to pay down debt. What would this do to the company's value?

Under Modigliani-Miller without taxes, the company's enterprise value is unchanged since equity replaces debt with no new assets created; with taxes, enterprise value decreases slightly due to the loss of the debt tax shield.

Between a software company or semiconductor company, which is going to have a worse credit rating, all else equal?

The semiconductor company will have a worse credit rating because its higher capital intensity, greater revenue cyclicality, and lower free cash flow conversion make its ability to reliably service debt through an economic cycle significantly weaker than a software company's.

Company A has EV/EBITDA 8x, EBITDA 200, leverage ratio 3x, and 100 shares outstanding. What is Company A's equity value and share price?

Enterprise Value is 8× × 200 = 1,600; Debt is 3× × 200 = 600; Equity Value = 1,600 − 600 = 1,000; Share Price = 1,000 ÷ 100 = $10.00.

Walk me through an NAV model.

You capitalize each asset's stabilized NOI at an appropriate market cap rate to get gross asset value, add other assets at market value, subtract debt, preferred equity, and other liabilities, then divide by fully diluted shares to arrive at NAV per share.

Now 100% cash financed by debt. No cash or debt currently on A's balance sheet. Taxes are 20%. A has a NI of 10 and B has a NI of 5. What does the cost of debt need to be to breakeven?

The breakeven cost of debt is r_d = B's NI ÷ (Purchase Price × (1 − t)) = 5 ÷ (PP × 0.80) = 6.25 / PP, or equivalently 1.25 / PE_B, where the after-tax interest exactly offsets B's net income.

Tell me four reasons a company would trade at a higher P/E than another company.

A company trades at a higher P/E due to (1) higher expected earnings growth, (2) lower risk or cost of equity, (3) a higher payout ratio, or (4) temporarily depressed current earnings deflating the denominator.

Tell me about a company you find interesting.

Pick one company, then walk through what it does and how it makes money, why the business model is compelling, its financial profile, how it's valued versus peers, and a specific catalyst plus key risk.

Why do you subtract the change in Working Capital when calculating Free Cash Flow to the Firm (FCFF)?

Because NOPAT is an accrual measure, and an increase in net working capital means cash was tied up in operations (e.g., uncollected receivables or inventory buildup) that the income statement doesn't reflect, so you subtract it to convert accrual profits into actual cash.

Company A has EV/EBITDA 8x, EBITDA 200, leverage ratio 3x, and 100 shares outstanding. Company B has EV/EBITDA 6x, EBITDA 100, leverage ratio 4x, and 50 shares outstanding. If Company A buys Company B in an all-stock deal and pays 7x EBITDA, what is the price per share?

The price per share is $6.00, calculated as the deal equity value of Company B [(7 × $100 EBITDA) − $400 debt = $300] divided by its 50 shares outstanding.

Suppose you have a company that is generating $50mm in EBITDA and trades at 4x. It has $100mm in senior debt and $200mm in junior debt. What is the equity value? What do you think the debt is trading at? Why?

Equity value is zero since the $200mm TEV cannot cover $300mm in total debt; senior debt trades at par (fully covered), while junior debt—the fulcrum security—trades around 50 cents on the dollar.

If you are evaluating a software company as an investment, what are the two metrics you would pay most attention to?

Net Dollar Retention (NDR) and ARR Growth Rate — NDR reveals the quality and durability of growth from existing customers, while ARR growth captures the overall magnitude of top-line scaling, together distinguishing compounding businesses from leaky buckets.

What is bond duration?

Bond duration is the present-value-weighted average time to receive a bond's cash flows. Macaulay duration measures that weighted-average time, while modified duration converts it into an approximate measure of the bond's percentage price sensitivity to a small change in yield.

A company issues $100 of equity and uses the proceeds to pay down debt. What would this do to the company's value?

Under Modigliani-Miller without taxes, the company's enterprise value is unchanged since equity replaces debt with no new assets created; with taxes, enterprise value decreases slightly due to the loss of the debt tax shield.

Between a software company or semiconductor company, which is going to have a worse credit rating, all else equal?

The semiconductor company will have a worse credit rating because its higher capital intensity, greater revenue cyclicality, and lower free cash flow conversion make its ability to reliably service debt through an economic cycle significantly weaker than a software company's.

Company A has EV/EBITDA 8x, EBITDA 200, leverage ratio 3x, and 100 shares outstanding. What is Company A's equity value and share price?

Enterprise Value is 8× × 200 = 1,600; Debt is 3× × 200 = 600; Equity Value = 1,600 − 600 = 1,000; Share Price = 1,000 ÷ 100 = $10.00.

Walk me through an NAV model.

You capitalize each asset's stabilized NOI at an appropriate market cap rate to get gross asset value, add other assets at market value, subtract debt, preferred equity, and other liabilities, then divide by fully diluted shares to arrive at NAV per share.

Now 100% cash financed by debt. No cash or debt currently on A's balance sheet. Taxes are 20%. A has a NI of 10 and B has a NI of 5. What does the cost of debt need to be to breakeven?

The breakeven cost of debt is r_d = B's NI ÷ (Purchase Price × (1 − t)) = 5 ÷ (PP × 0.80) = 6.25 / PP, or equivalently 1.25 / PE_B, where the after-tax interest exactly offsets B's net income.

Question Bank

Morgan Stanley IB Interview Questions

Q: How does the Morgan Stanley IB interview work?

First rounds are usually two short interviews blending technical and behavioral, followed by a superday of several interviews with the target coverage group. Morgan Stanley leans on clean fundamentals and clear communication. OFFERGOBLIN's Bank & Round mode mirrors this structure.

Q: What technical topics does Morgan Stanley focus on?

The three statements, valuation methodologies and how they compare, a DCF walkthrough, and group-relevant questions on the superday. Technology and Healthcare candidates should expect sector-flavored follow-ups. OFFERGOBLIN's Morgan Stanley-tagged questions cover both the core and the coverage depth.

Morgan Stanley investment banking interview questions from candidate reports across coverage groups. Format, common technicals, and how Morgan Stanley holds one of the Street's higher technical bars.

Morgan Stanley interviews carry one of the higher technical bars among the bulge brackets, alongside Goldman. First rounds move quickly through accounting and valuation, and superdays add coverage-group depth, particularly in strong franchises like Technology and Healthcare. Interviewers reward candidates who are both accurate and concise.

OFFERGOBLIN's Morgan Stanley filter pulls over 280 candidate-reported questions tagged to the firm. Use Bank & Round mode to drill the round you are preparing for, from the first-round screen to the superday.

Sample Morgan Stanley IB Interview Questions

A short sample from the full bank. Tap an answer to reveal it.

Morgan Stanley
Tell me four reasons a company would trade at a higher P/E than another company.
A company trades at a higher P/E due to (1) higher expected earnings growth, (2) lower risk or cost of equity, (3) a higher payout ratio, or (4) temporarily depressed current earnings deflating the denominator.
Work full answer in app
Morgan Stanley/ Superday/ Technology
Tell me about a company you find interesting.
Pick one company, then walk through what it does and how it makes money, why the business model is compelling, its financial profile, how it's valued versus peers, and a specific catalyst plus key risk.
Work full answer in app
Morgan Stanley
Why do you subtract the change in Working Capital when calculating Free Cash Flow to the Firm (FCFF)?
Because NOPAT is an accrual measure, and an increase in net working capital means cash was tied up in operations (e.g., uncollected receivables or inventory buildup) that the income statement doesn't reflect, so you subtract it to convert accrual profits into actual cash.
Work full answer in app
Morgan Stanley
Company A has EV/EBITDA 8x, EBITDA 200, leverage ratio 3x, and 100 shares outstanding. Company B has EV/EBITDA 6x, EBITDA 100, leverage ratio 4x, and 50 shares outstanding. If Company A buys Company B in an all-stock deal and pays 7x EBITDA, what is the price per share?
The price per share is $6.00, calculated as the deal equity value of Company B [(7 × $100 EBITDA) − $400 debt = $300] divided by its 50 shares outstanding.
Work full answer in app
Morgan Stanley/ Superday/ Generalist
Suppose you have a company that is generating $50mm in EBITDA and trades at 4x. It has $100mm in senior debt and $200mm in junior debt. What is the equity value? What do you think the debt is trading at? Why?
Equity value is zero since the $200mm TEV cannot cover $300mm in total debt; senior debt trades at par (fully covered), while junior debt—the fulcrum security—trades around 50 cents on the dollar.
Work full answer in app
Morgan Stanley/ 1st Round/ Technology
If you are evaluating a software company as an investment, what are the two metrics you would pay most attention to?
Net Dollar Retention (NDR) and ARR Growth Rate — NDR reveals the quality and durability of growth from existing customers, while ARR growth captures the overall magnitude of top-line scaling, together distinguishing compounding businesses from leaky buckets.
Work full answer in app
Morgan Stanley
What is bond duration?
Bond duration is the present-value-weighted average time to receive a bond's cash flows. Macaulay duration measures that weighted-average time, while modified duration converts it into an approximate measure of the bond's percentage price sensitivity to a small change in yield.
Work full answer in app
Morgan Stanley/ Superday
A company issues $100 of equity and uses the proceeds to pay down debt. What would this do to the company's value?
Under Modigliani-Miller without taxes, the company's enterprise value is unchanged since equity replaces debt with no new assets created; with taxes, enterprise value decreases slightly due to the loss of the debt tax shield.
Work full answer in app
Morgan Stanley
Between a software company or semiconductor company, which is going to have a worse credit rating, all else equal?
The semiconductor company will have a worse credit rating because its higher capital intensity, greater revenue cyclicality, and lower free cash flow conversion make its ability to reliably service debt through an economic cycle significantly weaker than a software company's.
Work full answer in app
Morgan Stanley
Company A has EV/EBITDA 8x, EBITDA 200, leverage ratio 3x, and 100 shares outstanding. What is Company A's equity value and share price?
Enterprise Value is 8× × 200 = 1,600; Debt is 3× × 200 = 600; Equity Value = 1,600 − 600 = 1,000; Share Price = 1,000 ÷ 100 = $10.00.
Work full answer in app
Morgan Stanley/ Superday/ Real Estate
Walk me through an NAV model.
You capitalize each asset's stabilized NOI at an appropriate market cap rate to get gross asset value, add other assets at market value, subtract debt, preferred equity, and other liabilities, then divide by fully diluted shares to arrive at NAV per share.
Work full answer in app
Morgan Stanley/ Superday/ Technology
Now 100% cash financed by debt. No cash or debt currently on A's balance sheet. Taxes are 20%. A has a NI of 10 and B has a NI of 5. What does the cost of debt need to be to breakeven?
The breakeven cost of debt is r_d = B's NI ÷ (Purchase Price × (1 − t)) = 5 ÷ (PP × 0.80) = 6.25 / PP, or equivalently 1.25 / PE_B, where the after-tax interest exactly offsets B's net income.
Work full answer in app

Frequently Asked Questions

How does the Morgan Stanley IB interview work?

What technical topics does Morgan Stanley focus on?

Sample Morgan Stanley IB Interview Questions

Frequently Asked Questions

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