When it’s time to calculate damages – How to ensure a reasonable discount rate
Abstract: Consider this scenario: A company goes to court to recover the lost profits it likely would have earned in the future had an employee not divulged the secrets to a competitor. But what’s the best way to determine those lost profits? As this article explains, a skillful financial expert can discount future damages to present value, providing the ammunition businesses need to receive a just award. It discusses the impact that discounting can have on damages awards, what affects the discount rate, and two approaches to calculating lost profits damages.