Module II· Interview Essentials — ValuationIntermediate
Question
What typical brain teasers or mental-math questions come up in IB interviews?
Answer
Top categories:
- Quick math: 'What is 17 × 23?' (Answer: 17 × 23 = 17 × 25 − 17 × 2 = 425 − 34 = 391).
- Back-of-the-envelope DCF: 'A company has EBITDA of $100m, WACC 8%, growth 3%, no capex needs — what's the EV?' (FCF ~$70m after a 30% tax, Gordon growth → 70 / (8% − 3%) = $1.4bn).
- Multiples math: 'At 12x EBITDA and $80m EBITDA, what's the EV? What's the equity value with $100m net debt?' (EV 960, equity 860).
- Logic puzzles: 'How many pianos are there in a city like Chicago?' (a Fermi-estimation exercise — population × proportion × penetration).
- Probability: 'You have 3 dice — what's the probability of rolling at least one 6?' (1 − (5/6)^3 = 91/216 ≈ 42%). Mental-math tip: round numbers, then adjust. Brain-teaser tip: think out loud, show your framing.
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Pitch tip
Senior MDs often use brain teasers as a 'stress test' — composure matters as much as the right answer.