Top interview questions to expect

1. Tell me about your interest in M&A.
2. Why do you want to work in M&A at our firm?
3. Describe your experience with financial modeling.
4. Walk me through a recent M&A transaction you followed.
5. How would you value a company?
6. What are the key drivers of M&A activity?
7. What are your strengths and weaknesses?

Check the latest questions for this role:

Answering interview questions with STAR structure

The STAR method is a structured way to answer behavioral interview questions. It stands for Situation, Task, Action, and Result. This method helps you provide specific, relevant, and impactful examples that showcase your skills and experience.

When using the STAR method, start by describing a specific situation or task you encountered. Then, explain the action you took in that situation and the result of your actions. This method allows you to demonstrate your ability to handle challenging situations, work effectively in a team, and achieve positive outcomes.

Sample answers to above interview questions

1. Tell me about your interest in M&A.

Example Answer:

“My interest in M&A stems from my fascination with the strategic decision-making process involved in mergers and acquisitions. I’m particularly drawn to the financial analysis and valuation aspects, where I can leverage my analytical skills and understanding of financial markets to assess the viability of deals. I’m also passionate about the impact M&A can have on companies, driving growth and creating value for stakeholders.

Explanation:

This answer uses the STAR method by highlighting a specific situation (interest in M&A), the task (financial analysis and valuation), the action (leveraging analytical skills), and the result (driving growth and creating value). It demonstrates a genuine interest in M&A and a strong understanding of the field.

2. Why do you want to work in M&A at our firm?

Example Answer:

“I’m drawn to your firm because of its reputation for excellence in M&A advisory. I admire your team’s deep industry expertise and track record of successful transactions. I’m particularly impressed by your work in [mention a specific industry or deal]. I believe my skills and experience in [mention relevant skills] would be a valuable asset to your team, and I’m eager to contribute to your continued success.”

Explanation:

This answer demonstrates research and tailored preparation. By mentioning specific projects or industries the firm is known for, the candidate showcases their understanding of the company’s strengths. The answer also highlights relevant skills and experience, demonstrating a clear understanding of the role’s requirements.

3. Describe your experience with financial modeling.

Example Answer:

“In my previous role at [previous company], I was responsible for building and maintaining financial models for various projects. I used Excel to develop models for [mention specific projects, e.g., valuation, merger analysis, forecasting]. I also played a key role in [mention specific contribution, e.g., identifying key assumptions, sensitivity analysis, scenario planning]. My experience has given me a strong understanding of financial modeling techniques and the importance of accuracy and clarity in model construction.”

Explanation:

This answer provides specific details about the candidate’s experience with financial modeling. It mentions specific projects, tools used, and contributions, demonstrating a practical understanding of the skill. The answer also highlights the candidate’s ability to work independently and contribute to team projects.

4. Walk me through a recent M&A transaction you followed.

Example Answer:

“I recently followed the acquisition of [target company] by [acquiring company]. I was particularly interested in [mention specific aspect, e.g., valuation methodology, regulatory hurdles, strategic rationale]. I analyzed the deal by [mention specific steps, e.g., reviewing press releases, financial statements, industry reports]. My analysis led me to conclude that [mention key takeaway, e.g., the deal was strategically sound, the valuation was fair, the integration process was likely to be successful]. This experience reinforced my interest in M&A and the complexities involved in successful transactions.”

Explanation:

This answer demonstrates the candidate’s ability to follow and analyze M&A transactions. It provides specific details about the transaction, the candidate’s analysis, and key takeaways. This showcases the candidate’s knowledge of the industry, ability to conduct independent research, and critical thinking skills.

5. How would you value a company?

Example Answer:

“There are several methods for valuing a company, each with its own strengths and weaknesses. The most common methods include:

* Discounted Cash Flow (DCF): This method projects future cash flows and discounts them back to present value using a discount rate. It’s considered a fundamental valuation method but relies on assumptions about future cash flows.
* Precedent Transactions: This method compares the target company to similar companies that have recently been acquired. It’s a market-based approach but can be influenced by market conditions.
* Comparable Company Analysis (CCA): This method compares the target company to publicly traded companies with similar characteristics. It’s also a market-based approach but can be affected by differences in financial structure and growth potential.

The best valuation method depends on the specific circumstances of the transaction and the availability of data. In practice, it’s common to use multiple methods to arrive at a range of valuations.”

Explanation:

This answer demonstrates a strong understanding of valuation methodologies. It provides clear explanations of different methods, their strengths and weaknesses, and the factors influencing their application. This showcases the candidate’s analytical skills and ability to think critically about valuation issues.

6. What are the key drivers of M&A activity?

Example Answer:

“M&A activity is driven by a variety of factors, including:

* Strategic Considerations: Companies may merge or acquire others to expand into new markets, gain access to new technologies, or enhance their competitive position.
* Financial Considerations: Companies may seek to acquire undervalued assets, increase their market share, or achieve cost synergies.
* Industry Dynamics: M&A activity can be influenced by industry consolidation, technological advancements, or regulatory changes.
* Market Conditions: Factors like interest rates, economic growth, and investor sentiment can impact M&A activity.

Understanding these drivers is crucial for analyzing and predicting M&A trends.”

Explanation:

This answer demonstrates the candidate’s knowledge of the factors influencing M&A activity. It provides a comprehensive list of key drivers and explains their impact on strategic, financial, industry, and market considerations. This showcases the candidate’s ability to understand the broader context of M&A transactions.

7. What are your strengths and weaknesses?

Example Answer:

“My strengths lie in my analytical skills, attention to detail, and ability to work effectively in a team. I’m also a quick learner and eager to take on new challenges.

One area I’m working on is my presentation skills. While I’m comfortable presenting to small groups, I’m looking to improve my ability to communicate complex information effectively to larger audiences. I’m currently taking a public speaking course to enhance my skills in this area.”

Explanation:

This answer provides a balanced and honest assessment of strengths and weaknesses. It highlights specific skills relevant to the role and acknowledges an area for improvement. The candidate demonstrates self-awareness and a proactive approach to professional development, indicating a commitment to continuous learning and growth.