A Question of Facts and Varying Rates “How could an expert apply such a high or low discount rate to a stream of future lost profits and the court find it acceptable?” This article highlights my research looking into discount rates for lost profits and why there are so many variations of a theme when it comes to making such a calculation. When attending professional conferences, I enjoy talking with other e ...

The Consequences When there is a Mismatch Between the CEO’s Strategy and the Lifecycle the Company is Operating In On December 10, 2021, Aswath Damodaran published a blog titled Musing on Markets. In this blog he asked what makes for a “great CEO”? What happens when there is a mismatch between the lifecycle the company operates in and the strategy pursued by the CEO? He then answered these questions based ( ...

Changing Assignments from Fairness Opinion to Business Valuation Commercial damages matters can be challenging and require a flexible mind when “wrapping your brain” around the issues and facts of a particular case. Beginning in the first quarter of 2019 and running through October 2020, I had an assignment which began with a simple fairness opinion letter and ended with my testifying at trial to defend my ...

Observations and Delaware Fair Value (Part II of II) This is the second of a two-part article, read Part I here, that focuses on empirical evidence supporting the size premium adjustment, observations regarding the CRSP size premium 10th decile category, liquidity issues that may account for the size premium, and certain Delaware Chancery Court decisions involving a size premium discussion. In this second p ...

For Calculating Future Lost Profits Robert Dunn and Everett Harry published their oft cited Modeling and Discounting Future Damages in 2002. The article laid out the process for assessing future lost profits and discounting them to present value. They argued modeling future losses reduced the uncertainty related to the loss calculation and therefore reduced the risk premium to be included in the discount ra ...

Particularly When Valuing Companies with Substantial Foreign Operations, Business Valuation Analysts Know That Country-Specific Input Is Critical  David Foster at BVWire News reports that in additional to his general data update for 2013, Prof. Aswath Damodaran (NYU Stern School of Business) provides a list of country default spreads and risk premiums.  Here's the professor's assessment: ...

Few Business Owners Seem to Even Know How to Make a Good Guess at What Their Business is Worth.  NY Times Introduces Technology to Help—and Certified Advisers Provide Extra Value.  Mark Cohen, at The New York Times Small Business Guide, reports:  "At 53, Joe Ritz is old enough to remember a time when many of the classic cars that now pull into his specialized repair shop were new. “It’s one field where it p ...

Aswath Damodaran, NYU's Legendary Valuation Expert, Recently Argues that there's a 90% Chance Apple is Undervalued.  Here's Why.   This comes in the wake of Apple shares' breathtaking plunge from recent highs. (That's be about $700 in September to $425 or so today.) In a new blog post, Sam Ro at Business Insider reports that Damodaran thinks that management can learn a few things from the recent market vola ...