M&A Interview Questions

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Investment Banking

Company A has P/E of 10x, higher than Company B. Interest rate on debt is 5%. If Company A acquires Company B (both 40% tax rate), should Company A use debt or stock for most accretion?
4 months ago1 answer
4 reasons a strategic can pay more for a target than a financial sponsor. How?
5 months ago1 answer
Buyer pays 100mm for the seller in all stock deal but market decides it's worth 50mm. What happens?
6 months ago1 answer
In an all-stock transaction, how do you know if the transaction is accretive or dilutive?
a year ago1 answer
What would the impact be on M&A activity if the tax rate were to decrease to 20%?
10 months ago1 answer
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Exchange ratio formula for 100% stock deal. If buyer stock price is $50 and target offer price is $70, what is the exchange ratio?
5 months ago1 answer
Company A has revenue of 100mm, Company B has revenue of 100mm. When company A acquires company B, revenues become 300m, with no revenue synergies. How is this possible?
3 months ago1 answer
What are the most effective ways to demonstrate and realize value quickly after an acquisition?
4 months ago1 answer
Calculate implied premium paid assuming unaffected share price of $50 and offer price is $67.50
a year ago1 answer
Company A buys company B with 100% debt. Company B has P/E of 10x and Company A has P/E of 15x. What interest rate is required on the debt to make the deal dilutive? Assume a 40% tax rate.
a year ago1 answer
Why is cash preferred to acquire companies?
10 months ago1 answer
Company has 10,000 shares at $20, 100 options at $10 exercise, 50 RSUs, 100 convertible bonds at $10 conversion price and $100 par value. Calculate diluted shares.
10 months ago1 answer
If the equity of a company is less than its worth or value, what must you include in an acquisition?
a year ago1 answer
Walk me through a merger model at a high level.
9 months ago1 answer
Why might a seller prefer a financial sponsor over a strategic buyer?
10 months ago1 answer
A deal is dilutive by 10 cents per share. The buyer has 100M shares and a 20% tax rate. What pretax synergies are needed to break even?
a year ago1 answer
Two companies each earning $15M of Net Income combine in an all-stock deal. Why might the combined company earn less than $30M?
3 months ago1 answer

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M&A Interview Questions

Company A has P/E of 10x, higher than Company B. Interest rate on debt is 5%. If Company A acquires Company B (both 40% tax rate), should Company A use debt or stock for most accretion?

4 reasons a strategic can pay more for a target than a financial sponsor. How?

Buyer pays 100mm for the seller in all stock deal but market decides it's worth 50mm. What happens?

In an all-stock transaction, how do you know if the transaction is accretive or dilutive?

What would the impact be on M&A activity if the tax rate were to decrease to 20%?

Exchange ratio formula for 100% stock deal. If buyer stock price is $50 and target offer price is $70, what is the exchange ratio?

Company A has revenue of 100mm, Company B has revenue of 100mm. When company A acquires company B, revenues become 300m, with no revenue synergies. How is this possible?

What are the most effective ways to demonstrate and realize value quickly after an acquisition?

Calculate implied premium paid assuming unaffected share price of $50 and offer price is $67.50

Company A buys company B with 100% debt. Company B has P/E of 10x and Company A has P/E of 15x. What interest rate is required on the debt to make the deal dilutive? Assume a 40% tax rate.

Why is cash preferred to acquire companies?

Company has 10,000 shares at $20, 100 options at $10 exercise, 50 RSUs, 100 convertible bonds at $10 conversion price and $100 par value. Calculate diluted shares.

If the equity of a company is less than its worth or value, what must you include in an acquisition?

Walk me through a merger model at a high level.

Why might a seller prefer a financial sponsor over a strategic buyer?

A deal is dilutive by 10 cents per share. The buyer has 100M shares and a 20% tax rate. What pretax synergies are needed to break even?

Two companies each earning $15M of Net Income combine in an all-stock deal. Why might the combined company earn less than $30M?

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