Investment Banking Flashcards
6 cards from real Banking practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Investment Banking flashcards as text
What is a 'pitch book' in investment banking?
Answer: A presentation prepared by bankers to win advisory mandates from clients
A pitch book is a marketing presentation that investment banks prepare to showcase their capabilities and proposed deal strategies to win business from potential clients.
In a merger, what does 'accretion/dilution analysis' measure?
Answer: Whether the deal increases or decreases the acquirer's earnings per share
Accretion/dilution analysis determines whether a transaction will increase (accretive) or decrease (dilutive) the acquirer's earnings per share after closing.
What is 'book building' in an equity offering?
Answer: The process of gauging investor demand to determine the final offering price and allocation
Book building involves collecting and recording investor bids (indicating desired price and quantity) to help set the final IPO or secondary offering price.
What is a 'hostile takeover'?
Answer: A merger where the target's board rejects the bid and the acquirer pursues shareholders directly
In a hostile takeover, the acquirer bypasses the target's management and board — who have rejected the offer — and approaches shareholders directly via a tender offer or proxy fight.
Which of the following is a common defense against a hostile takeover?
Answer: A rights plan ('poison pill')
A poison pill is a shareholder rights plan that allows existing shareholders to buy additional shares at a discount if a hostile bidder acquires a certain stake, diluting the acquirer's ownership.
What does 'SPAC' stand for in investment banking?
Answer: Special Purpose Acquisition Company
A SPAC is a shell company that raises capital through an IPO with the sole purpose of acquiring or merging with a private company, providing an alternative route to going public.