Optimal Number of Trials for Monte Carlo Simulation

A Monte Carlo Simulation is a technique is often used to find fair value for financial instruments for which probabilistic distributions are unknown.

Equity Incentive Awards Based on Total Shareholder Return

Share-based payments have led to boardroom creativity around an equity incentive award’s design, prompting developments in valuation approaches.

Understanding Convertible Debt Valuation

At a time of generally low interest rates, convertible notes are alternatives to straight debt securities.

Techniques for Valuing Carried Interest

In receiving value only if a threshold is met, carried interests have an asymmetric payoff similar to a stock option.

Financial Sponsor: Hedge Fund

‚ÄčA shareholder of a closely-held hedge fund was not receiving the appropriate level of compensation per agreement with the controlling interest shareholder.

Key Points in Valuing Profits Interests

Profits Interests are valued as options, and when estimating their fair value consider the total equity framework, including vesting interests.

Common Valuation Issues With Illiquid Securities

Nuanced securities typically contain options and market conditions that alter cash flows over the life of the security and raise valuation challenges.

Healthcare

Property taxes were levied on only real property portion of a hospital, key to analysis was separating the value of the business ops from that of real property.

Brands: Food & Beverage

A leading manufacturer of branded food products engaged VRC to estimate the fair value of certain intangible assets acquired in a business combination.

Fair Value Pricing: How Directors Can Avoid Material Risks

Valuation specialists must be prepared to defend the choice of valuation methodology, assumptions and judgments to those who depend on valuations.