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Build a concise present → evidence → finance motivation → why this role structure.
INTERVIEW STUDIO
Practice technical, market, behavioral, mental-math and case questions by finance career. Each question is paired with what it tests, an ideal reasoning structure and follow-ups designed to expose shallow memorization.
Valuation logic, enterprise/equity value bridge, discounting and ability to structure a technical answer.
What happens to a DCF valuation if WACC rises by 100 bps?
Simple answerProject the cash generated by the core business before interest payments.
WhyUnlevered free cash flow lets you value operations independently of the company’s financing structure.
Example / implicationStart from EBIT (Earnings Before Interest and Taxes), apply taxes, add depreciation, then subtract capital expenditures and the change in net working capital.
Simple answerEstimate WACC (Weighted Average Cost of Capital), the blended required return of equity and debt investors.
WhyWACC is normally used to discount unlevered free cash flow because it reflects the cost of financing the whole business.
Example / implication70% equity at 10% plus 30% after-tax debt at 5% gives a WACC of 8.5%.
Simple answerEstimate the value of all cash flows beyond the explicit forecast period.
WhyA large part of company value often comes from cash flows generated after years 1–5.
Example / implicationUse a perpetual-growth formula or an exit multiple and then check that the implied assumptions are reasonable.
Simple answerDiscount the forecast cash flows and terminal value back to today.
WhyMoney received in the future is worth less than money received today.
Example / implicationPV = CF / (1 + r)^n. PV = Present Value, CF = Cash Flow, r = discount rate and n = number of periods.
Simple answerAdd the present value of forecast cash flows and the present value of terminal value to obtain EV (Enterprise Value).
WhyA DCF (Discounted Cash Flow) values the operating assets available to both debt and equity holders.
Example / implication600 M$ of forecast cash-flow value plus 1.4 B$ of terminal-value present value gives 2.0 B$ of Enterprise Value.
Simple answerMove from Enterprise Value to the value attributable to common shareholders.
WhyEnterprise Value includes claims from lenders and other stakeholders, while Equity Value belongs to shareholders.
Example / implicationIf EV is 2.0 B$, debt is 300 M$ and cash is 100 M$, Equity Value is about 1.8 B$ before other adjustments.
Build a concise present → evidence → finance motivation → why this role structure.
Percentages, growth rates, breakevens, multiples, probability and market arithmetic.
Connect current macro events to assets, sectors, valuation and the role you are interviewing for.