Just for fun, guest author, Dwight Grant, illustrates the use of probability simulation versus the “what if” scenarios of golf’s upcoming FedEx Cup.
A Monte Carlo Simulation is a technique is often used to find fair value for financial instruments for which probabilistic distributions are unknown.
The principles developed in valuing common stock options can provide insight into what sports contracts are worth and how they affect risk.
Valuations for complex instruments such as options, warrants, convertible bonds, contingent consideration, preferred & common stock
Nuanced securities typically contain options and market conditions that alter cash flows over the life of the security and raise valuation challenges.
The asymmetric nature of carried interests requires the consideration of a range of scenarios.
Companies need valuations for various forms of equity-based compensation. Early-stage companies need a valuation health-check, pre-IPO
ASC 805 provides guidance for whether it is contingent consideration or compensation.
A private equity sponsored cloud based provider of manager content, enterprise lending services granted certain management incentive units to participating executives, as compensation to incentivize management performance.
A PE-sponsored cloud based provider granted equity compensation incentives to executives. To comply with financial reporting requirements of Accounting Standards Codification 718 (ASC 718), the provider engaged VRC to determine the fair value of the issued units.