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- Title
Discount Rates for Lost Profits: A Question of Fact and Appropriate Approach.
- Authors
Needham, Allyn
- Abstract
This article explores the calculation of discount rates for lost profits in litigation consulting. It presents different approaches for determining the lost profits amount and discount rate, with experts having differing opinions on which approach is appropriate. The article discusses the use of risk-adjusted rates and risk-free rates in discounting lost profits, and the varying approaches accepted by courts. While the U.S. Supreme Court has provided guidance on discount rates in other areas of litigation, it has not specifically addressed discounting lost profits. The article emphasizes the need to consider the specific circumstances of each case when determining the appropriate discount rate, and provides examples of different methods used in various legal cases. Overall, the determination of the discount rate is a question of fact and should be based on the available information at the time of analysis.
- Subjects
DISCOUNT prices; BUSINESS valuation; EXPERT evidence; DISCOUNTED cash flow; DEBTOR &; creditor
- Publication
Value Examiner, 2024, p4
- ISSN
1094-3137
- Publication type
Article