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DCF Interview Questions for Investment Banking
The DCF questions candidates get asked most often, plus the short answers and mistakes that matter most in interviews.
DCF questions are common because they test whether you understand value, not just formulas.
Questions to expect
- What is a DCF?
- Why use unlevered free cash flow?
- What changes the terminal value most?
- Why might the output move even if revenue is unchanged?
- When is a DCF less reliable?
What interviewers care about
They want to hear:
- clean structure
- correct intuition
- awareness of assumptions and sensitivity
If you only recite the steps, the answer feels incomplete.
Common mistakes
- confusing enterprise value and equity value
- treating terminal value like a plug with no judgment
- ignoring discount rate sensitivity