Towards the end of the interview, i.e. after the experiential and case potions, the interviewer will ask if you have any questions for him/ her. This is a great opportunity to demonstrate your knowledge and a keen interest in consulting in general, and the firm in particular. However, before you ask your question, if there … Continue reading How to close the deal
Bankers and finance officials at companies have a couple of financing options when they consider how to structure a merger: a stock swap or a cash deal. Stock swaps occur more often when there is a strong stock market, because companies with a high market capitalization can acquire companies with that more valuable stock. In … Continue reading Stock Swaps vs. Cash Offers
There are two main categories of buyers of companies: strategic buyers and financial buyers. Strategic buyers are corporations who want to acquire another company for strategic business reasons. Financial buyers are buyers who want to acquire another company purely as a financial investment. Financial buyers are typically LBO (Leveraged Buyout) Funds or other private equity … Continue reading Types of buyers and their valuation method.
Another derivative, a swap, is a simple exchange of future cash flows. Some popular forms of swaps include foreign exchange swaps and interest rate swaps. Let’s first examine foreign exchange swaps. Say Sun Microsystems outsources its software development to India on a regular basis. In such a situation, it would make payments to the firms … Continue reading What are Swaps
The futures contract is a type of forward that calls for the delivery of an asset or its cash value at a specified delivery or maturity date for an agreed upon price. This price is called the futures price, and is to be paid when the contract matures. The trader who commits to purchasing the … Continue reading What are Futures?
A forward contract is an agreement that calls for future delivery of an asset at an agreed-upon price. Let’s say a farmer grows a single crop, wheat. The revenue from the entire planting season depends critically on the highly volatile price of wheat. The farmer can’t easily diversify his position because virtually his entire wealth … Continue reading What are Forwards