Corporate Finance Executive Interview Questions UK: 8 Real Questions and What Interviewers Want

Before your Corporate Finance Executive interview, it helps to see the questions from the interviewer's side. We have picked eight from our set of 12 and added the reason each one gets asked.

Eight Corporate Finance Executive interview questions, and what the interviewer is thinking

1. Walk me through how you would build a discounted cash flow valuation, including how you arrive at the discount rate and terminal value.

Why they ask: A DCF is the staple of corporate finance work, and they want to see you can build and defend one.

2. Why corporate finance, and what do you expect to be doing day to day as an executive on a transaction team?

Why they ask: They want to confirm you understand the work and are committed to its demands.

3. How would you bridge from enterprise value to equity value, and why does it matter in a deal?

Why they ask: Mistakes in the bridge change the price, so they test your precision.

4. What is the difference between completion accounts and a locked box mechanism, and when would each be used?

Why they ask: Pricing mechanisms are fundamental to SPAs, and they want to see you understand them.

5. What regulatory and legal considerations could affect a UK acquisition, other than the price?

Why they ask: Deals often fail on regulation, so they want to know you can spot it early.

6. How do you select comparable companies and transactions, and which multiples would you use for different types of business?

Why they ask: Relative valuation is used constantly in pitches, so they test your judgement.

7. You discover a formula error in your valuation model, which has already been sent to the client in a draft pitch. What do you do?

Why they ask: They check integrity and how you handle your own mistakes under pressure.

8. Tell me about a time you built a financial model or valuation that was used to support a client decision.

Why they ask: They want evidence of real modelling experience and its impact.

A sample answer to question 1

Walk me through how you would build a discounted cash flow valuation, including how you arrive at the discount rate and terminal value.

I start with a forecast of unlevered free cash flow, normally five years: EBITDA, less tax on operating profit, capex and working capital movements. The discount rate is the weighted average cost of capital. I derive cost of equity using CAPM, with a risk-free rate from gilt yields, an equity risk premium and a beta from comparable listed companies, re-levered to the target's capital structure, and for a small private business I would add a size or specific risk premium. Cost of debt is the after-tax borrowing rate. For terminal value I use either the Gordon growth method, with a growth rate at or below long-term GDP, or an exit multiple, and I cross-check one against the other. I then discount everything to present value to get enterprise value, and bridge to equity value. Terminal value often accounts for most of the value, so I always run sensitivities on WACC and growth.

Common mistake to avoid: Presenting a single point value; using a growth rate above long-term GDP

Want the rest?

Full model answers, key points and common mistakes for all 12 questions are on the Corporate Finance Executive interview questions page. The first five are free, no sign-up needed.