Investment Banking Practice Exam

Investment Banking 

Investment banking is the division of a bank or monetary organization that serves legislatures, partnerships, and foundations by giving endorsing (capital raising) and consolidations and acquisitions (M&A) warning administrations. Investment banks go about as delegates between financial backers (who have the cash to contribute) and organizations (who expect funding to develop and maintain their organizations). This will cover what investment banking is and what investment investors really do.

Skills required

MBA or similar education and experience.

Bachelor’s degree

Ability to work in an environment with minimal supervision.

Working knowledge of structuring and principles of the deal and closing.

Strong communication

Strong networking skills.

Strong research, analytical skills.

Ability to track imbricating tasks with quick changes.

Who should take the exam?

Any person who has a good hand in understanding financial assets and investing has the potential to become an Investment Banker. Although, this field has a high rivalry, and having a professional program degree or diploma in a related discipline makes a student ideal possibility for a job. 

Financial experts who wish to work as entry-level investment bankers are needed to pass the Series 79 exam.  Competitors should likewise finish the Securities Industry Essentials test to get enlistment, in spite of the fact that it isn't needed that the tests are taken together.

Career opportunities

Mergers and Acquisitions (M&A)


Private Equity

Venture Capital

Table of Contents

Comparable Companies Analysis

  • Summary of Comparable Companies Analysis Steps
  • Step I. Select the Universe of Comparable Companies
  • Step II. Locate the Necessary Financial Information
  • Step III. Spread Key Statistics, Ratios, and Trading Multiples
  • Step IV. Benchmark the Comparable Companies
  • Step V. Determine Valuation
  • Key Pros and Cons
  • Illustrative Comparable Companies Analysis for ValueCo
  • Notes

Precedent Transactions Analysis

  • Summary of Precedent Transactions Analysis Steps
  • Step I. Select the Universe of Comparable Acquisitions
  • Step II. Locate the Necessary Deal-Related and Financial Information
  • Step III. Spread Key Statistics, Ratios, and Transaction Multiples
  • Step IV. Benchmark the Comparable Acquisitions
  • Step V. Determine Valuation
  • Key Pros and Cons
  • Illustrative Precedent Transaction Analysis for ValueCo
  • Notes

Discounted Cash Flow Analysis

  • Summary of Discounted Cash Flow Analysis Steps
  • Step I. Study the Target and Determine Key Performance Drivers
  • Step II. Project Free Cash Flow
  • Step III. Calculate Weighted Average Cost of Capital
  • Step IV. Determine Terminal Value
  • Step V. Calculate Present Value and Determine Valuation
  • Key Pros and Cons
  • Illustrative Discounted Cash Flow Analysis for ValueCo
  • Notes

Leveraged Buyouts

  • Key Participants
  • Characteristics of a Strong LBO Candidate
  • Economics of LBOs
  • Primary Exit/Monetization Strategies
  • LBO Financing: Structure
  • LBO Financing: Primary Sources
  • LBO Financing: Selected Key Terms
  • LBO Financing: Determining Financing Structure
  • Notes

LBO Analysis

  • Financing Structure
  • Valuation
  • Step I. Locate and Analyze the Necessary Information
  • Step II. Build the Pre-LBO Model
  • Step III. Input Transaction Structure
  • Step IV. Complete the Post-LBO Model
  • Step V. Perform LBO Analysis
  • Illustrative LBO Analysis for ValueCo
  • Notes

Sell-Side M&A

  • Auctions
  • Organization and Preparation
  • First Round
  • Second Round
  • Negotiations
  • Closing
  • Negotiated Sale
  • Notes

Buy-Side M&A

  • Buyer Motivation
  • Acquisition Strategies
  • Form of Financing
  • Deal Structure
  • Buy-Side Valuation
  • Merger Consequences Analysis
  • Illustrative Merger Consequences Analysis for the BuyerCo / ValueCo Transaction
  • Notes

Initial Public Offerings

  • Why Do Companies Go Public?
  • Characteristics of a Strong IPO Candidate
  • Key Participants
  • Selected Key Terms
  • Dual-Track Process
  • Special Purpose Acquisition Companies (SPACs)
  • Direct Listings
  • Post-IPO Equity Offerings
  • IPO Considerations
  • Nasdaq Appendix
  • Notes

The IPO Process

  • Organization and Preparation
  • Due Diligence, Drafting, and Filing
  • Marketing and Roadshow
  • Pricing and Allocation
  • Notes

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