1
EVERCORE PREP WITH CORRECT /ACCURATE
ANSWERS| 100% RATED CORRECT !! 2025-2026|
100% SURE PASS
Explain the purpose of an investment bank to a 5 year
old. -
-Solution -2 Main Functions - 1) Help companies that
need capital, raise capital from those who have it
2) Provide strategic advice to companies
What is the equation for unlevered FCF? -
-Solution -EBIT*(1-TR)+D+A-CapEx-ChangeInNWC
What is the formula for net working capital -
-Solution -non-cash current assets minus non-interest
bearing current liabilities. An asset is determined
current if it will be used up within the greater of 1 yr or
an Operating Cycle (Cash-to-Cash)
Revenue to Unlevered FCF -
-Solution -Rev - Cogs = GM - Operating Expense=
EBITDA - DA= EBIT *(1-TR) = NOPAT + D + A = OCF -
CapEx - ChangeInNWC
Net Income to Unlevered FCF -
-Solution -Net Income + Interest + Taxes = EBIT *(1-TR)
= NOPAT + D + A = OCF - CapEx - ChangeInNWC
Unlevered FCF to Levered FCF -
, 2
-Solution -Unlevered FCF + taxadjusted interest income
-taxadjusted interest expense + Net Debt (Cash from
newly issued debt - mandatory debt repayments)
Explain a DCF -
-Solution -Purpose of a DCF is to find the present value
of the future cash flows that a company generates. Two
main components - projection period and terminal value.
In the projection period, you forecast the full financial
statements for the company and use WACC as a
discount rate to get to PV. For terminal value, you are
trying to calculate the value of the cash flows from the
end of the projection period to perpetuity. There are
two main methods to do that - 1) Gordon Growth
Method 2) Multiples Method. After you find the
terminal value, you discount that back to present value
as well using WACC. Add the two components to find
the Enterprise Value of the company.
Key Value Drivers in a DCF -
-Solution -WACC, Timing of Cash Flows, Terminal Value,
Capital Expenditures, Changes in Net Working Capital,
Margins, Increase Revenue or Cut Costs.
Walk me through Precedent Transactions -
-Solution -1. Selecting the Universe of Transactions
2. Calculate key statistics, rations and Trading Multiples
3.Benchmark and Spread the Comparable Companies
4. Determining Valuation Based on the median of the
comparable companies exit multiple
EVERCORE PREP WITH CORRECT /ACCURATE
ANSWERS| 100% RATED CORRECT !! 2025-2026|
100% SURE PASS
Explain the purpose of an investment bank to a 5 year
old. -
-Solution -2 Main Functions - 1) Help companies that
need capital, raise capital from those who have it
2) Provide strategic advice to companies
What is the equation for unlevered FCF? -
-Solution -EBIT*(1-TR)+D+A-CapEx-ChangeInNWC
What is the formula for net working capital -
-Solution -non-cash current assets minus non-interest
bearing current liabilities. An asset is determined
current if it will be used up within the greater of 1 yr or
an Operating Cycle (Cash-to-Cash)
Revenue to Unlevered FCF -
-Solution -Rev - Cogs = GM - Operating Expense=
EBITDA - DA= EBIT *(1-TR) = NOPAT + D + A = OCF -
CapEx - ChangeInNWC
Net Income to Unlevered FCF -
-Solution -Net Income + Interest + Taxes = EBIT *(1-TR)
= NOPAT + D + A = OCF - CapEx - ChangeInNWC
Unlevered FCF to Levered FCF -
, 2
-Solution -Unlevered FCF + taxadjusted interest income
-taxadjusted interest expense + Net Debt (Cash from
newly issued debt - mandatory debt repayments)
Explain a DCF -
-Solution -Purpose of a DCF is to find the present value
of the future cash flows that a company generates. Two
main components - projection period and terminal value.
In the projection period, you forecast the full financial
statements for the company and use WACC as a
discount rate to get to PV. For terminal value, you are
trying to calculate the value of the cash flows from the
end of the projection period to perpetuity. There are
two main methods to do that - 1) Gordon Growth
Method 2) Multiples Method. After you find the
terminal value, you discount that back to present value
as well using WACC. Add the two components to find
the Enterprise Value of the company.
Key Value Drivers in a DCF -
-Solution -WACC, Timing of Cash Flows, Terminal Value,
Capital Expenditures, Changes in Net Working Capital,
Margins, Increase Revenue or Cut Costs.
Walk me through Precedent Transactions -
-Solution -1. Selecting the Universe of Transactions
2. Calculate key statistics, rations and Trading Multiples
3.Benchmark and Spread the Comparable Companies
4. Determining Valuation Based on the median of the
comparable companies exit multiple
