How would you perform a valuation for a water utility like Maynilad? Walk me through your approach.
Why This Is Asked
No verbatim questions or confirmed interview process details are publicly documented for this role at MPIC. This question is grounded in the role's confirmed duties (financial modeling and valuation across infrastructure and utility assets) and tests the candidate's technical knowledge of valuation principles applied to regulated industries.
General Approach
Structure your answer methodically, starting with the purpose of the valuation, then moving through DCF, comparable companies, and precedent transactions. Highlight utility-specific considerations like rate base regulation, cost of equity, and terminal value assumptions.
Sample STAR Answer▾
Situation
While interning at an investment bank, I assisted in valuing a regional water utility company that was facing a regulatory reset.
Task
I had to build a discounted cash flow (DCF) model and perform a comparable company analysis.
Action
I gathered historical financials, projected cash flows using rate base growth and allowed return assumptions, and selected comparable water utilities across Southeast Asia. I calculated the weighted average cost of capital (WACC) considering regulatory risk and used a perpetuity growth model for the terminal value.
Result
My valuation contributed to a fairness opinion, and the senior banker praised my attention to regulatory details.
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