Page 8 - Economic Damage Calculations
P. 8
Lost Profits Damages .................................................................................................................................... 25
Lost Business Value Damages ...................................................................................................................... 25
Transaction as the Subject of the Dispute ..................................................................................................... 26
Personal Injury, Wrongful Death, and Wrongful Termination Cases .......................................................... 26
Reasonable Royalty and Defendant’s Profits or Unjust Enrichment ............................................................ 27
Benefit of the Bargain Damages ................................................................................................................... 27
Other Measures of Damages or Losses ......................................................................................................... 27
Factors Influencing a Damages Analysis .......................................................................................................... 27
Standards and Burden ....................................................................................................................................... 28
Causation....................................................................................................................................................... 28
Reasonable Certainty .................................................................................................................................... 28
Foreseeability ................................................................................................................................................ 29
Chapter 5 — Accounting for Risk in a Damages Calculation ........................................................................ 30
Risk Considered in the Discount Rate—Capital Markets Approach ................................................................ 30
Risk Considered in the Cash Flows—Expected Cash Flow Approach ............................................................ 31
Hybrid Approach .............................................................................................................................................. 33
Discount Rate as Reinvestment Rate ................................................................................................................ 34
Chapter 6 — Uncertainty and Consideration of Risk in Calculations of Damages...................................... 35
Methods for Addressing Uncertainty and Risk ................................................................................................. 35
Ex Ante Approach Versus Ex Post Approach ................................................................................................... 36
Figure 6-1 ...................................................................................................................................................... 38
Figure 6-2 ...................................................................................................................................................... 39
An After-Tax Discount Rate ............................................................................................................................. 39
Additional Considerations in Discounting ........................................................................................................ 40
Willing or Unwilling Transaction? ............................................................................................................... 40
Value to the Plaintiff ..................................................................................................................................... 41
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