P/E of A is 10x. P/E of B is 20x. If A acquires B, is it accretive or dilutive?

The deal is dilutive to A's EPS because in an all-stock deal, a lower-P/E buyer (10x) acquiring a higher-P/E target (20x) must issue proportionally more shares than the earnings gained.

Which is more important and why: revenue synergies, cost synergies, or a strategic acquisition?

Cost synergies are generally most important because they are highly quantifiable, within management's control, and realized quickly, though in IP- or pipeline-driven deals, strategic rationale can dominate the acquisition thesis.

What happens if you write up assets for book purposes but not for cash tax purposes?

A deferred tax liability is created equal to the difference between the higher book basis and the lower tax basis multiplied by the tax rate, since future tax deductions will be smaller than book depreciation.

What's a control premium? Why does it exist?

A control premium is the amount a buyer pays above the target's unaffected trading price to gain control. It exists because control enables synergies, strategic decisions, and access to the company's full cash flows.

What is a typical sell-side M&A process?

A sell-side M&A process involves preparation (teaser, CIM, valuation), a first round (teasers, NDAs, IOIs), a second round (data room, management presentations, LOIs), negotiation and signing of a definitive agreement, and closing after regulatory approvals.

What is the goal of an LBO?

The goal of an LBO is to generate a high IRR (typically 20%+) on the sponsor's equity investment by using leverage to amplify returns through debt paydown, EBITDA growth, and potential multiple expansion.

What makes a good LBO candidate?

A good LBO candidate has stable and predictable cash flows supporting high leverage, strong free cash flow conversion for debt paydown, defensible market position, opportunities for EBITDA growth and margin expansion, low capex needs, and a clear exit path.

Walk me through an LBO conceptually.

A PE firm acquires a company using mostly debt, uses the company's free cash flow to pay down that debt over ~5 years, then exits — generating equity returns through EBITDA growth, debt paydown, and multiple expansion.

How do you determine how much debt to use in an LBO?

You determine LBO debt by taking the most restrictive of lender-imposed leverage multiples, interest/fixed-charge coverage ratios, and debt market conditions, then stress-testing that the company's cash flows can service the debt while still meeting the sponsor's return targets.

Sponsor vs. LP: what's the difference?

The sponsor or GP manages the private equity fund and makes investment decisions. LPs provide most of the capital and receive returns after fees and carry.

How can a PE firm increase its return in an LBO? List 5 ways.

A PE firm can increase LBO returns by: (1) growing revenue, (2) expanding margins, (3) achieving multiple expansion at exit, (4) paying down debt during the hold period, and (5) increasing leverage at entry to reduce the initial equity check.

A PE firm is looking for an exit for a portfolio company - what are the considerations for doing an IPO vs. selling to another PE firm vs. selling to a strategic buyer, and how are these considerations impacted by market dynamics?

The PE firm weighs valuation potential, certainty of close, speed of liquidity, and execution costs across IPO, secondary buyout, and strategic sale, with market dynamics—equity valuations, credit conditions, and industry consolidation—shifting the optimal exit, often best navigated via a dual-track process.

P/E of A is 10x. P/E of B is 20x. If A acquires B, is it accretive or dilutive?

The deal is dilutive to A's EPS because in an all-stock deal, a lower-P/E buyer (10x) acquiring a higher-P/E target (20x) must issue proportionally more shares than the earnings gained.

Which is more important and why: revenue synergies, cost synergies, or a strategic acquisition?

Cost synergies are generally most important because they are highly quantifiable, within management's control, and realized quickly, though in IP- or pipeline-driven deals, strategic rationale can dominate the acquisition thesis.

What happens if you write up assets for book purposes but not for cash tax purposes?

A deferred tax liability is created equal to the difference between the higher book basis and the lower tax basis multiplied by the tax rate, since future tax deductions will be smaller than book depreciation.

What's a control premium? Why does it exist?

A control premium is the amount a buyer pays above the target's unaffected trading price to gain control. It exists because control enables synergies, strategic decisions, and access to the company's full cash flows.

What is a typical sell-side M&A process?

A sell-side M&A process involves preparation (teaser, CIM, valuation), a first round (teasers, NDAs, IOIs), a second round (data room, management presentations, LOIs), negotiation and signing of a definitive agreement, and closing after regulatory approvals.

What is the goal of an LBO?

The goal of an LBO is to generate a high IRR (typically 20%+) on the sponsor's equity investment by using leverage to amplify returns through debt paydown, EBITDA growth, and potential multiple expansion.

What makes a good LBO candidate?

A good LBO candidate has stable and predictable cash flows supporting high leverage, strong free cash flow conversion for debt paydown, defensible market position, opportunities for EBITDA growth and margin expansion, low capex needs, and a clear exit path.

Walk me through an LBO conceptually.

A PE firm acquires a company using mostly debt, uses the company's free cash flow to pay down that debt over ~5 years, then exits — generating equity returns through EBITDA growth, debt paydown, and multiple expansion.

How do you determine how much debt to use in an LBO?

You determine LBO debt by taking the most restrictive of lender-imposed leverage multiples, interest/fixed-charge coverage ratios, and debt market conditions, then stress-testing that the company's cash flows can service the debt while still meeting the sponsor's return targets.

Sponsor vs. LP: what's the difference?

The sponsor or GP manages the private equity fund and makes investment decisions. LPs provide most of the capital and receive returns after fees and carry.

How can a PE firm increase its return in an LBO? List 5 ways.

A PE firm can increase LBO returns by: (1) growing revenue, (2) expanding margins, (3) achieving multiple expansion at exit, (4) paying down debt during the hold period, and (5) increasing leverage at entry to reduce the initial equity check.

A PE firm is looking for an exit for a portfolio company - what are the considerations for doing an IPO vs. selling to another PE firm vs. selling to a strategic buyer, and how are these considerations impacted by market dynamics?

The PE firm weighs valuation potential, certainty of close, speed of liquidity, and execution costs across IPO, secondary buyout, and strategic sale, with market dynamics—equity valuations, credit conditions, and industry consolidation—shifting the optimal exit, often best navigated via a dual-track process.

Advanced Investment Banking Interview Questions

Q: What are advanced investment banking interview questions?

Advanced IB interview questions test LBO returns, accretion/dilution, merger math, synergy value sharing, terminal value edge cases, sector-specific valuation, and judgment under follow-up pressure.

Q: How do you prepare for LBO intuition questions?

Practice explaining the equity bridge: entry equity, EBITDA growth, debt paydown, exit enterprise value, exit debt, exit equity, MOIC, and IRR. Then drill the direction of each driver until you can answer under 90 seconds.

Q: Are advanced IB questions only asked in Superdays?

No. Advanced questions are more common in Superdays and final rounds, but strong first-round interviewers can ask LBO, accretion/dilution, or DCF sensitivity follow-ups if a candidate handles the basics well.

Q: How many advanced IB questions should I practice before interviews?

Practice enough to cover the main advanced buckets: LBO returns, merger math, synergies, terminal value, and sector-specific valuation. For most candidates, that means at least 50 advanced questions after the beginner and intermediate base is stable.

Q: What should I do if I miss advanced technical questions?

Classify the miss. If it was a formula miss, drill the mechanic. If it was a direction miss, rebuild the intuition. If it was a pressure miss, practice saying the first clean 30-second version out loud before adding detail.

Q: What is the hardest LBO question banks ask in IB interviews?

The hardest standard LBO question is the on-the-fly paper LBO with synergies, where the interviewer asks for IRR given entry multiple, leverage, EBITDA growth, debt paydown, and a synergy capture assumption, all without a calculator. The trap is forgetting to net synergies through the equity bridge or anchoring on MOIC instead of IRR.

Q: How do I prepare for Superday IB technical follow-ups?

Superday follow-ups are usually variants of the same LBO and DCF questions you have already seen, with one assumption flipped or the answer pushed back on. Practice giving a 30-second first answer, then defending or revising it when the interviewer challenges the direction. Run mock pressure rounds where a friend pushes back on every answer with - are you sure - or - what if the opposite were true.

A practical article-style question list for candidates preparing for Superdays, later rounds, and pressure follow-ups.

By Michael Neal13 min readGOBLIN100 Questions 82-9312 written answersLast updated May 6, 2026

Advanced investment banking interview questions test judgment under pressure: LBO returns, synergies, merger math, terminal value edge cases, and sector-specific valuation.

GOBLIN100 Questions 82-93

Use this advanced list after the accounting and DCF base is automatic. These questions reward clear assumptions, fast arithmetic, and a calm answer when the setup is messy. These are positions 82-93 of the ordered GOBLIN100 ramp.

GOBLIN100 #82Lazard/ 1st Round/ Technology
P/E of A is 10x. P/E of B is 20x. If A acquires B, is it accretive or dilutive?
The deal is dilutive to A's EPS because in an all-stock deal, a lower-P/E buyer (10x) acquiring a higher-P/E target (20x) must issue proportionally more shares than the earnings gained.
Work full answer in app
GOBLIN100 #83Greenhill/ 1st Round/ M&A
Which is more important and why: revenue synergies, cost synergies, or a strategic acquisition?
Cost synergies are generally most important because they are highly quantifiable, within management's control, and realized quickly, though in IP- or pipeline-driven deals, strategic rationale can dominate the acquisition thesis.
Work full answer in app
GOBLIN100 #84Bank of America/ 1st Round/ Healthcare
What happens if you write up assets for book purposes but not for cash tax purposes?
A deferred tax liability is created equal to the difference between the higher book basis and the lower tax basis multiplied by the tax rate, since future tax deductions will be smaller than book depreciation.
Work full answer in app
GOBLIN100 #85OFFERGOBLIN
What's a control premium? Why does it exist?
A control premium is the amount a buyer pays above the target's unaffected trading price to gain control. It exists because control enables synergies, strategic decisions, and access to the company's full cash flows.
Work full answer in app
GOBLIN100 #86Greenhill/ 1st Round/ Generalist
What is a typical sell-side M&A process?
A sell-side M&A process involves preparation (teaser, CIM, valuation), a first round (teasers, NDAs, IOIs), a second round (data room, management presentations, LOIs), negotiation and signing of a definitive agreement, and closing after regulatory approvals.
Work full answer in app
GOBLIN100 #87Moelis/ 1st Round/ Generalist
What is the goal of an LBO?
The goal of an LBO is to generate a high IRR (typically 20%+) on the sponsor's equity investment by using leverage to amplify returns through debt paydown, EBITDA growth, and potential multiple expansion.
Work full answer in app
GOBLIN100 #88Moelis/ 1st Round/ Generalist
What makes a good LBO candidate?
A good LBO candidate has stable and predictable cash flows supporting high leverage, strong free cash flow conversion for debt paydown, defensible market position, opportunities for EBITDA growth and margin expansion, low capex needs, and a clear exit path.
Work full answer in app
GOBLIN100 #89Lazard/ Superday/ Technology
Walk me through an LBO conceptually.
A PE firm acquires a company using mostly debt, uses the company's free cash flow to pay down that debt over ~5 years, then exits — generating equity returns through EBITDA growth, debt paydown, and multiple expansion.
Work full answer in app
GOBLIN100 #90Evercore/ 1st Round/ PCM
How do you determine how much debt to use in an LBO?
You determine LBO debt by taking the most restrictive of lender-imposed leverage multiples, interest/fixed-charge coverage ratios, and debt market conditions, then stress-testing that the company's cash flows can service the debt while still meeting the sponsor's return targets.
Work full answer in app
GOBLIN100 #91OFFERGOBLIN
Sponsor vs. LP: what's the difference?
The sponsor or GP manages the private equity fund and makes investment decisions. LPs provide most of the capital and receive returns after fees and carry.
Work full answer in app
GOBLIN100 #92Greenhill/ 1st Round/ M&A
How can a PE firm increase its return in an LBO? List 5 ways.
A PE firm can increase LBO returns by: (1) growing revenue, (2) expanding margins, (3) achieving multiple expansion at exit, (4) paying down debt during the hold period, and (5) increasing leverage at entry to reduce the initial equity check.
Work full answer in app
GOBLIN100 #93Credit Suisse
A PE firm is looking for an exit for a portfolio company - what are the considerations for doing an IPO vs. selling to another PE firm vs. selling to a strategic buyer, and how are these considerations impacted by market dynamics?
The PE firm weighs valuation potential, certainty of close, speed of liquidity, and execution costs across IPO, secondary buyout, and strategic sale, with market dynamics—equity valuations, credit conditions, and industry consolidation—shifting the optimal exit, often best navigated via a dual-track process.
Work full answer in app

What this level tests

LBO returns and sponsor math
Debt paydown, multiple expansion, and EBITDA growth
Synergy value sharing and strategic buyer logic
Biotech and finite-life asset valuation
Terminal value sensitivity and edge cases

Past this point, interviewers stop testing knowledge and start testing pressure. The questions are LBO mechanics, sponsor logic, terminal value edge cases - content you have seen - but the bar is whether you defend the assumption set when they push back.

How to know you are ready

You can frame the first answer in under 90 seconds.
You can defend the assumption set when the interviewer pushes back.
You can handle paper LBO, synergy, and terminal value changes without a calculator.
You can separate formula misses from judgment misses after each rep.

Advanced vs other question levels

Level	Example prompts	Ready when
Beginner	What does an investment bank do? What is enterprise value? Walk me through a DCF.	You can explain the concept cleanly before the first follow-up.
Intermediate	What happens if taxes fall in a DCF? How do AP days affect valuation?	You can connect formulas to valuation direction and name the trap.
Advanced	Calculate the LBO IRR. Why would a buyer not pay away all synergy value?	You can answer under pressure and defend the assumption set.

Keep practicing in the full bank.

These twelve samples are public. The full question bank and adaptive engine live in the practice app.

This advanced investment banking interview question set pairs each prompt with a written direct answer, GOBLIN100 position, and bank context so candidates can compare question difficulty before moving into the full OFFERGOBLIN practice bank.

Run GOBLIN100

The ordered 100-question ramp. Definitions, linkage, and judgment, in order. Best when you want a clear path from where you are to interview-ready.

Start ramp

Practice in GOBLINMODE

Adaptive selection across the full bank. Pulls weak areas first and cycles questions you keep missing. Best for refining a working answer set.

Open GOBLINMODE

Frequently Asked Questions

What are advanced investment banking interview questions?

How do you prepare for LBO intuition questions?

Are advanced IB questions only asked in Superdays?

How many advanced IB questions should I practice before interviews?

What should I do if I miss advanced technical questions?

What is the hardest LBO question banks ask in IB interviews?

How do I prepare for Superday IB technical follow-ups?