GENERAL

1. How do you value a company?
2. What are the differences between DCF and LBO?
3. What are the differences between public comparables and transaction comparables?
4. Why a company is valuable?
5. Why would you value a company?
6. How does a company obtain resources for its business? Debt vs. Equity?
7. How to free up capital (if I need cash next week, what can I do?)**
8. What is hurdle rate?
9. How would you value a company with no revenue?

DCF

1. Walk me through a DCF calculation
2. Pros and cons of DCF?
3. How do you do DCF a Bio company vs. a Grocery Chain?
4. How do you calculate free cash flow?
5. What is CAPEX?
6. What is working capital? 
7. Is negative working capital bad?**
8. WACC calculation
9. What is CAPM?
10. What is the imperfection of CAPM?**
11. How do you find risk free rate?
12. How do you find the risk premium for an asset / the equity?
13. Define Beta for a layman. How do you get the Beta? Why do you un-lever a Beta (unbiased of measure of risk)?
14. What if you get a negative Beta?**
15. Is Beta constant or does it vary over time?
16. What do you think the Beta of [GM] is? Of a high-tech company such as [Cisco]?
17. What does the WACC curve look like? At what point it goes to the lowest? 

COMPS

1. Relative valuation: what are the problems?**
2. Compare equity value to enterprise value. How do you go from enterprise value to equity value?
3. What is net debt? Why minus cash from debt?**
4. Where to get the comps universe?
5. How do you choose trading comps?
   
6. How do you choose transaction comps?
7. What is market cap? EIBT? EBITDA? Adjusted EBITDA?
8. What are appropriate multiples for enterprise value and equity value?
9. What multiple would a high-tech company use? A financial institution? Other industries?
10. What are some common non-recurring items?
11. Interpreting the multiples (from three angles: size/risk/growth)
12. If there are no comparable companies in the market, how can we apply the comparable methods?**
13. What adjustment you will make when using trading comps or transaction comps? (different country/public vs. private, etc.)
14. Two banks, one is trading at 12x P/E and the other is trading at 16x P/E, which one will you buy and why?

M&A

1. Purchasing accounting treatment
2. What is control premium? How do you value control premium?
3. Why merger? (synergies, etc.)
4. Who will pay more for a company: strategic buyers or financial buyers?
5. How do you decide your consideration?
6. What is a hostile tender offer?
7. Accretive vs. Dilutive Mergers (P/E1>P/E2, accretive or dilutive? common reasons for accretion/dilution?)
8. If you are a company of $100 million with 100 million shares and you are buying a company of $50 million with 100 million shares, using stock swaps of 1:4, will the transaction be accretive or dilutive?
9. Describe a recent M&A transaction you’ve read about
10. What were the reasons behind the M&A transaction you’ve read about? Does the transaction make sense?
11. Can you name two companies that you think should merge?
12. Your client is a privately held human resources software company. You are advising the company in a potential sale. Who would you expect to pay more for the company: Oracle Software (a competitor), or Kohlberg Kravis Roberts (an LBO fund?)
13. Company A is considering acquiring Company B. Company A’s P/E multiple is 55x, whereas Company B’s P/E multiple is 30x. After Company A acquires Company B, will pro forma EPS rise, fall, or stay the same?
14. If Company A buys Company B, what will the Balance Sheet of the combined company look like when A acquires <20%/20% – 50%/>50%?
15. What are some common anti-takeover tactics?
16. Who will be potential buyers for a talent agency?**
17. How do you treat the convertible bonds in an M&A deal?
18. If you are a sell-side advisor, what will you emphasis to persuade a buyer to buy the target? (depends on type of buyers)
19. P/E of 20x vs. P/E of 25x, which has the higher ROA/ROE?

LBO

1. What is an LBO? Why do you want to lever up a firm?
2. What is a leveraged buyout? How is it different from a merger?
3. What company is a typical LBO target of PE firms?
4. Why is LBO so profitable?
5. Common multiples used by LBO?
6. How can you make more money from an LBO deal?**

APV**

1. What is Adjusted Present Value (APV)?**
2. When do you use cost of equity and when do you use cost of debt for DTS?**
3. Approximation of DTS**
4. Which is higher, APV or WACC? Why?**

EQUITY

1. What is preferred stock?
2. What is stock splits? 
3. Stock buybacks: followed by an increase of price, why?
4. New stock issues: followed by a drop of stock price, why?
5. What kind of equity would you issue for a start-up company?
6. When should a company buyback shares? Examples?
7. Is the dividend paid on common stock taxable to shareholders? Preferred stock? is it tax deductible for the company?**
8. When should a company issue stock rather than debt to fund its operations?
9. Why would an investor buy preferred stock?
10. Why would a company distribute its earnings through dividends to common stock shareholders?
11. What did the S&P 500 close at yesterday? Dow at now? The yield on the Long Bond?**
12. Why did the stock price of XYZ company decline yesterday when it announced increased quarterly earnings?**
13. Can you tell me about a recent IPO that you have followed?
14. Why do some stocks rise so much on the first day of trading after their IPO and others don’t? Why is that money left on the table?**
15. How can a company raise its stock price? (buyback, operations changes, structuring, dividend increase)

DEBT

1. Inverted treasury curve? Yield curve?**
2. Holding Period Return (HPR)
3. Callable bonds**
4. Forward rates**
5. Relationship between inflation rate / interest rate / economy and bond market**
6. Relationship between leading economic indicators (GDP/Unemployment/Inflation) and bond market**
7. When should a company issue debt instead of issuing equity
8. If the stock market falls, what would you expect to happen to bond prices, and interest rates?
9. What is securitization?**
10. Short-term debt vs. long-term debt**

OTHER

1. What is an efficient market?**
2. What is Black Scholes?**
3. Bridge loan (or Swing loan)**
4. What’s the relationship between NPV and IRR?**
5. Revenue doubled in 5/10/20 years, what’s the IRR? (7-10 rule) What about 6 years? (rule of 72)
6. What is Modigliani and Miler Proposition?**
7. What is operating leverage?
8. Who’s Fed’s chairman now?**
9. What’s the prime rate now?**

BS/IS/CF

1. Explain relationship between three financial statements
2. Walk me through the statement of cash flow in detail
3. Walk me through the major items of an Income Statement
4. What is unfunded pension liability?**
5. What’s capital lease? vs. operating lease?**
6. What’s off-balance-sheet liabilities?
7. What is the impact of LIFO and FIFO accounting methods on 1) earnings and 2) cash flow?
8. What is LIFO liquidation?
9. WHat are retained earnings?**
10. Which financial statement will you choose to make a judgement on the operation of a company?
11. What is meant by “accrual” accounting?**
12. How do you decide between asset and expenses?**
13. What is book value?**
14. Show me the impact of company buying an asset?
15. Show me the impact of company selling an asset?
16. What’s the tax impact of spin-off, split-off, and carve-out?
17. What happens to each of the financial statements if you change 1)gross margin, 2) capex, 3)…?

TAX

1. What causes deferred tax assets/liabilities? What else will cause deferred tax assets?
2. What is the impact of increased/decreased deferred taxes on cash flow?
3. Tax loss carry-forwards / tax credits?**
4. How do managers manipulate earnings?

From http://blog.sina.com.cn/s/blog_68663b7d0100y3lp.html