How to Walk Through a DCF at Moelis 2027 (Step by Step)
"Walk me through a DCF" is the single most asked question in Moelis interviews — and the single most failed. Most candidates can name the steps; almost none can explain each step's logic while an interviewer fires follow-ups. If your DCF walkthrough is shaky, your Moelis process ends in the first technical round.
What a Moelis DCF Interview Walkthrough Must Include
A Moelis DCF interview answer needs five components, in order: (1) project unlevered free cash flow for five to ten years, (2) discount it at WACC, (3) calculate terminal value — via perpetuity growth or exit multiple, (4) discount the terminal value and sum to get enterprise value, (5) bridge from enterprise value to equity value and divide by diluted shares. Saying the steps is table stakes; the interview is in the follow-ups — "why unlevered FCF?", "how do you pick the discount rate?", "which terminal method and why?"
The Step-by-Step DCF Script That Survives Follow-Ups
"I project unlevered free cash flow — EBIT times one minus tax, plus D&A, minus capex, minus change in working capital — because I'm valuing the whole firm, independent of capital structure. I discount at WACC, the blended cost of the firm's financing. For terminal value I prefer the exit multiple method for cyclical businesses and perpetuity growth otherwise, then sanity-check one against the other. Sum of discounted cash flows plus discounted terminal value gives enterprise value; subtract net debt, divide by diluted shares for the price per share."
Learn that logic, not just the words.
Preparing Your Moelis DCF Interview
- Use real Moelis questions. Our 2027 Moelis Investment Banking Online Assessment Tutorials has the exact DCF questions Moelis asks — including every classic follow-up — with model answers that show the reasoning, not just the formula.
- Practice the "why" behind every step. For each line of the walkthrough, prepare a one-sentence justification.
- Time yourself. A crisp DCF walkthrough takes about two minutes. Rambling for five signals you do not actually understand it.
A DCF you cannot explain clearly is worse than no DCF answer at all — it tells the interviewer your technical foundation is memorized, not understood. This is the highest-leverage two minutes of your entire Moelis interview. Prepare it with real questions until the follow-ups feel easy.
FAQs
How long should a DCF walkthrough take? About two minutes for the core walkthrough, with follow-ups extending the discussion. Brevity with depth is the goal.
Which terminal value method is better? Neither universally — exit multiple suits cyclical or asset-heavy businesses; perpetuity growth suits stable growers. Know when to use each and say why.
What discount rate do you use in a DCF? WACC — the weighted average cost of capital — because you are discounting unlevered cash flows available to all capital providers.
What is the most common DCF follow-up at Moelis? "Walk me from enterprise value to equity value" — net debt, noncontrolling interests, and other adjustments. Know the bridge cold.
Preparing for Moelis & Company's DCF questions? Our 2027 Moelis Investment Banking Online Assessment Tutorials has the exact questions and answers — $79 one-time, instant download.
