Date: Tuesday, September 29, 2015
10:00am-2:00pm PT / 1:00pm-5:00pm ET
Format: A BVR Webinar

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Michael Pellegrino
Pellegrino & Associates, LLC

Dave MacAdam

About This Program

Get a fresh take on Monte Carlo simulations with the perfect combination of the practical and the theoretical from BVR’s four-hour advanced web workshop, Monte Carlo: From Classroom to Boardroom to Courtroom. Expert intellectual property appraiser Mike Pellegrino will lay the foundation by addressing the origins and theory of Monte Carlo with an emphasis on how to apply it in your valuations. He’ll be joined by Dave MacAdam who will cover real world examples from his role as Senior Manager of Innovation Strategy for global aluminum company Novelis. Within the framework of R&D projects, MacAdam will address how Monte Carlo simulations play an important role in deciding whether to invest in a given project and how to use @Risk to evaluate its probable value and analyze key risk drivers. Pellegrino will bring everything together with a discussion of how the Courts view Monte Carlo, along with tips to clearly present and address the criticisms of Monte Carlo in the courtroom.


  • Introduction
    • Basics
      • Uncertainty introduction
        • What is uncertainty
        • Where uncertainty exists in valuation
      • Existing methods for accounting for uncertainty
        • No accounting
        • Simple averages
        • Best case, worst case, expected case modeling
      • Existing method deficiencies
        • Scalability problems
        • Interdependency problems
        • Propagation errors
      • What is Monte Carlo Simulation
        • Origins
        • How it works
        • Common tools on the market
    • Applying Monte Carlo Simulation
      • Where it applies
        • Past events
        • Future events
        • Early stage valuations
        • Later stage valuations
      • Simple example
        • Price
        • Demand
        • Expenses
      • Advanced concepts
        • Risk variance
        • Time variance
    • Advanced concepts
      • Picking the sampling algorithm
      • Picking the right distribution
      • Repeatability of the results
  • Monte Carlo simulation in the Real World
    • Introduction to Novelis
    • R&D process overview
    • Applying simulation to the R&D process
  • Using Monte Carlo Simulation in Litigation
    • How to present to the trier of fact
      • What to expect
      • Technical challenges
      • Making it understandable
    • Common attack points and defenses
      • Basic simulation use
      • False precision or accuracy
      • Improper model construction
      • Improper distribution selections
      • High coefficient of determination
      • Expert’s knowledge of statistics
        • Terms
        • How to interpret charts
    • Real-world case examples

    Learning Objectives

    • Learn the use and application of  Monte Carlo simulation in business valuation
    • Learn how to integrate Monte Carlo simulation into models
    • Identify advanced concepts for Monte Carlo simulation analysis
    • Understand the use of Monte Carlo simulation for evaluating research and development candidates
    • Define best practices of using and defending Monte Carlo simulation in business valuation litigation

Single Connection Policy
Admission to this event authorizes one computer and phone connection for one location. These connections may be transferred users and/or locations. Multiple concurrent connections for a single admission registration are not allowed.

Multi-User CPE Policy
Admission to this program includes one CPE certificate for one individual. Any additional listeners requesting CPE must provide a $50 processing fee assessed at the completion of the online CE survey for this course.

CPE Processing Fees may be bypassed by entering a valid, unused CPE Authorization Code (for single event purchasers) or by logging into BVR's website (for subscribers to BVR's Training Series).

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CPE Information

Prerequisites: Knowledge of Business Valuation
Program Level: Advanced
Preparation Required: None
Delivery Method: Group Internet-Based
Recommended CPE: 4.5 Credit Hours (Specialized Knowledge & Applications)

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