sales analyst interview questions shared by candidates
"Company A with a market cap of $25B announces a $5B stock buy-back program. How would the CDS on Company A react?"
Is this correct? A stock buyback with reduce cash and equity, which increase the leverage ratio. That would increase the CDS spread.
Yorkville seems right. Leverage goes up and there is less cash now. Higher risk of default leads to higher risk premium --> higher cds spread
This wasn't difficult, but it's the only specific question I can remember. You're playing basketball and you're down by 2. You know you can hit a 2-pointer to tie the game with 28% probability, and then go on to win the game in overtime with 50% probability. Alternatively, you know you can hit a 3-pointer and win with 15% probability. Which do you take?