Oct 08, 2026 by Offer

Walk Me Through a DCF 2027: William Blair Interview Guide

Walk through five steps: project free cash flows, discount them at WACC, estimate terminal value, sum to enterprise value, then bridge to equity value. The William Blair DCF interview prompt is commonly reported by candidates as the single most frequent technical question, so this walkthrough must be fluent and assumption-aware.

What William blair DCF interview Assess

A DCF tests whether you understand intrinsic valuation from first principles. Interviewers listen for the logic chain: cash is what matters, time has a cost, and the discount rate reflects risk. Reciting steps without understanding why each exists is the classic failure mode. Expectations may vary by role and region; check the firm's official careers page.

How to Answer Step by Step: william blair DCF interview

Project free cash flow. Forecast unlevered free cash flow for five to ten years: EBIT, taxes, plus depreciation, minus capex and working capital changes. State that assumptions drive everything.
Discount at WACC. Explain WACC as the blended required return of debt and equity holders, and discount each year's cash flow back to today.
Terminal value. Use either the perpetuity growth method or an exit multiple, and note that it often dominates the valuation, which is why the assumptions deserve scrutiny.
Sum to enterprise value. Add the present values of the forecast cash flows and the terminal value.
Bridge to equity value. Add cash, subtract debt and minority interests, then divide by diluted shares for a per-share value.

End with the key caveat: a DCF is only as good as its assumptions, so sensitivity analysis matters.

Common Mistakes

Forgetting the bridge. Stopping at enterprise value when asked for a share price is the most common slip.
Mixing levered and unlevered cash flows. Match the cash flow definition to the discount rate.
No intuition on WACC. Know directionally what raises or lowers it: risk, leverage, and rates.

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FAQ

Perpetuity growth or exit multiple? Know both. Perpetuity growth ties to long-run economics; exit multiples tie to market comparables. Interviewers often ask which you prefer and why.

What growth rate is reasonable? At or below long-term GDP growth for mature companies. Anything heroic needs justification.

How do I handle negative cash flows? Normalise or extend the forecast until the business stabilises; do not capitalise early losses blindly.

Should I mention sensitivity tables? Yes, briefly. Showing you test key assumptions signals professional maturity.

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