Investment Banking Interview Questions — Part 2
Embarking on a career in investment banking demands a sharp understanding of complex financial concepts, often tested through rigorous interview questions. In this article, we dissect common queries, from Enterprise Value to fully diluted shares, offering insights to help both seasoned professionals and newcomers navigate the challenging landscape of investment banking interviews. Join us as we break down these questions, providing practical knowledge to enhance your preparation for success in this dynamic field.
Is it possible for a company to possess a negative Equity Value? What would that signify?
No, this is not feasible as a negative share count and share price cannot exist.
Why is Preferred Stock added to arrive at Enterprise Value?
Incorporating Preferred Stock is essential because it pays a fixed dividend and holders have a higher claim to a company’s assets than equity investors. Consequently, Preferred Stock is considered more akin to debt than common stock.
