Archive 2022-166: Developing the Discount Rate for Lost Profits Claims

**Webinar 166: Live Broadcast Date: April 5, 2022, 1:00-3:00 pm EDT**

VPS StraightTalk Webinar Series: Developing the Discount Rate for Lost Profits Claims

Speakers: Roger J. Grabowski, FASA and Jaime C. d’Almeida, ASA, CFE

Legal principles and financial theory hold that future damages should be discounted to present value using a discount rate that accounts for the risk and uncertainty of achieving forecast cash flows. While the theory is easy, actually estimating the appropriate discount rate is anything but.
Roger Grabowski and Jaime D’Almeida will review the general theory of matching discount rates and risks, the differences between the risks of a business and the risks of a lost profits or economic damages claim, the differences between using a discount rate in ex ante and ex post analyses, and differences in data sets available for estimating discount rates and how to use those data to match the risks of the lost profit claim.

Learning Objectives:
In this session, the participant will:

Understand the difference between a discount rate for a business and one appropriate for a lost profits claim
Develop a conceptual and practical understanding of developing a discount rate
How to better measure discount rate inputs
Learn the nuances of data sets available for developing discount rates and how to match to the risk of the lost profits
Develop an understanding of the differences between ex ante and ex post discount rates
Develop an understanding of how to develop a discount rate appropriate for the lost profits claim
Learn common errors made in developing discount rates

Handouts

• Copy of the VPS webinar PowerPoint slides
• Access to a video recording of the program.