Knopman Marks: Interview Prep for Investment Bankers

Knopman Marks is pleased to announce the introduction of our newest app: Interview Prep for Investment Bankers. The app draws on our expertise having trained thousands of investment bankers for their FINRA Series 79 exams. The app has hundreds of multiple-choice questions and rationales on topics including underwriting, interpreting and adjusting financial statements, performing valuation, and advising and facilitating on M&A deals. Using the app will allow candidates to prepare for their investment banking interviews and confidently navigate through any technical question they may face.

Currently, Knopman Marks has partnered with Cornell University to help their MBA students reach their career goals.

Read more about the Knopman Marks and the IB App at:

• Fortune Magazine: www.fortune.com/2015/11/17/wall-street-job-interview-app
• Press release: https://finance.yahoo.com/news/samuel-curtis-johnson-graduate-school-131200068.html
• App store link: https://itunes.apple.com/us/app/cornell-knopman-interview/id1034184809?mt=8

Sample question

Question: Executive Transport Inc. is considering buying Startup Transport Inc. Precedent transactions have been executed at 6.7x EBITDA. Startup Transport has 54 million shares outstanding, LTM EBITDA of $126m, net debt of 97m, and cash of 12m. Based on the median of the precedent transactions, what is a reasonable acquisition price per share for Startup Transport Inc.?

(Answer below.)

Rationale: Applying the 6.7x precedent transactions multiple to Startup Transport Inc.’s LTM EBIDTA gives an EV of 6.7 x 126 = 844.2. Market cap = EV – net debt = 747.2. (Note that cash is not required explicitly, it is baked into the net debt.) Share price = market cap/shares outstanding = 747.2/54 = 13.84.