WSO Interview Questions With Complete Solutions, Exams of Nursing

Download WSO Interview Questions With Complete Solutions and more Exams Nursing in PDF only on Docsity! WSO Interview Questions With Complete Solutions How does 15% PIK interest on $100 debt flow through the 3 statements if the tax rate is 33%? $100 debt with 15% PIK interest means an interest expense of $15 and $15 of new debt is issued. With a tax rate of 33%, that produces a tax shield of $5, which means net income is down by $10. Net income flows into the retained earnings account on the balance sheet and to the top of the statement of cash flows. On the statement of cash flows, PIK interest is a non-cash expense so it's added back. Do, net income is down $10, and $15 of PIK interest is added back, making the net change in cash up by $5. This net change flows into the assets section of the balance sheet, so total assets are up $5. Under liabilities, $15 of new debt is issued, Under equity, retained earnings is down by $10. So liabilities and equity together are up by $5 which balances with the assets side. If you get the offer, what is one problem that we will have with you in your mid-summer review? TBD If I spoke with your friends, what are two positives and negatives they would say about you? TBD How does PIK interest expense flow through the statements? TBD Where does tax affect a DCF? There's 3 places for tax in a DCF: calculating FCF, calculating cost of debt, and gettting beta. ? TBD A bond has a face value of 100 and it is worth 80 today. It also has a coupon of 10% paid annually and there are 2 years to maturity. What is the yield to maturity? 25% (Coupon Payments + (Face - Price)) / Price. 40 / 80 = .5. The YTM is 25% because the bond matures in 2 years A company has an enterprise value of 6 million, 100 million in cash, total enterprise value of 500 million, 100 million in PPE, 100 million shares outstanding. What is the company's current debt? EV = Enterprise Value + Debt - Cash Equity Value = 10 mil * 6 = 60000000 500 = 60 mil - 100mil + Debt Debt = 540 Million (Interviewer said PPE does not impact the EV, not entirely sure why) A busines has had positive EBITDA for the past few years and announces on its earnings call that it has experienced a huge growth in EBITDA. However, the company is still fillling for banktrupucy, how is this possible? TBD If a company with a higher PE acquires a company with a lower PE, what happens to A/D? TBD What happens to EV when a company issues stock? TBD What does an LBO entail? TBD What are some factors you would consider when deciding on an LBO? TBD What are some drivers for LBO returns? TBD Why not go to buy side? TBD what different levers can you play with that impact accretion TBD how do you adjust asset sales on the three statements? TBD How do you adjust for PIK interest on the three statements? TBD what are the ways a CEO can use cash? TBD how does issuing a dividend with debt raised affect the cap structure? TBD walk me through a merger model? TBD what are the ways in an LBO to increase returns? TBD What is the midyear convention? TBD What is PIK debt and can you give an example of how $100m of issuing PIK debt flows through the 3 statements TBD how $20 of Cost of Goods Sold affects the 3 statements? TBD would I rather have a 5% increase in Revenue or in EBITDA TBD When would precedent transaction analysis give you a lower valuation than comparable company analysis? TBD Walk me through the IRR calculation TBD Why banking? TBD Different things that influence WACC TBD Walk me through a recent deal that you followed TBD How could a company go bankrupt if they have had positive EBITDA for the past 8 years TBD If the enterprise value fo the company is $50mm and they raise $25 in equity, what is the equity value of the company assuming they have no debt? TBD A company decides to do a $100 write-down of debt. Assuming a 20% tax rate, walk me through the three financial statements. TBD TBD What happens in the three statements if you buy a factory with 50% cash and 50% debt? IS: Nothing happens; CF: CFI decreases by $100, CFF increases by $50, net cash down by $50; BS: Cash = -$50, PP&E = $100 so Asset = $50. Liabilities = $50. So it balances. ? What are NOLs? TBD is better to increase price by 1 dollar or produce x+1 products. TBD what do you do outside of work TBD How would you react if you made a mistake in a pitch book and noticed it during a client meeting? TBD What differentiates a great analyst from a good analyst TBD What's your biggest weakness TBD What other valuation methods can you think of? (besides the main three) TBD How do people use LBO other than a LBO transaction TBD Why do people say LBO typically provides a floor valuation TBD What benchmarks are commonly used within a comparable companies analysis? TBD Calculate how much of the merged company an acquirer or seller owned after the deal. TBD How do you get to unlevered free cash flow in a DCF? TBD List the three different places taxes affect the DCF. TBD How do you calculate cost of equity? TBD How would you calculate beta for a private company? TBD Which would you rather have: $100m of cost synergies or $100m of revenue synergies(from cross-selling)? TBD Why would a company have a higher P/E multiple than another company if they both have the same EV/EBITDA multiples? TBD In what cases would terminal value comprise a high percentage of value in a DCF? TBD A company borrows $100 of debt to pay a dividend of $100. How does this affect EV? TBD Tell me about something that's interesting. TBD Given a set of ratios and asked to point out what was wrong with them TBD Walk me through the acquisition process TBD What information would you use to create a comps universe TBD TBD What are your opinions on the markets right now? TBD What is your opinion on the geopolitical tensions? TBD What risks do companies face in terms of governance? TBD What do you think will be the next big thing? TBD What differentiates you from other candidates? TBD what happens to the 3 financial statements during a debt write- down. TBD How many people get married each year in the United States. TBD Why is the cash flow statement more useful than the balance sheet in valuing a company. TBD What is our current share price. TBD Describe a situation why a company would have a higher EV/EBITDA multiple. TBD Why do you want to do investment banking compared to any other field. TBD How does an increase of $10 in depreciation in year 2 affect the DCF. How is it affected when mid year convention is used? TBD Walk me through an accretion dilution model. TBD IRR drivers for an LBO? TBD EV/EBITDA falls from 10x to 5x, EV/Sales falls from 4x to 2x. What happens to EBITDA margin and why? Companies with negative beta, company with beta of less than one, companies with beta of 1, and companies with a beta of more than 1. Interest rate is 5%, interest expense is 2M, earning is 10M, P/E is 5x, Ev/ebitda is 5x, D&A is 5M, ignore cash, what's tax rate? What is a cash sweep and how does it affect an LBO.