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Valuation in IB interviews

Are there any specific valuation techniques or formulas I should prioritize for investment banking interviews?

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PrepLounge
on Jan 30, 2025

Hello there, 

Thank you for your question! For investment banking interviews, we'd recommend to focus on the following three valuation methods:

  1. Comps – Compare similar public companies using valuation multiples like EV/EBITDA or P/E. This gives a quick market-based benchmark.
  2. Precedent Transactions – Analyze past M&A deals for similar companies to see what buyers have paid in real transactions.
  3. DCF (Discounted Cash Flow) – Project future cash flows and discount them to present value using WACC. This is more detailed but crucial for fundamental valuation.

If you understand these and when to use each, you’ll be well-prepared! We wish you much success for your interviews! 🚀

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