Local Pharmacy ABC generates $500M in net income. Every year previously the owners have paid themselves as a dividend the full amount of net income. Assuming a 40% cost of capital for similar, small size regional pharmacies, what is the value of the local pharmacy? 

Then, next year, the pharmacy is looking to expand by adding an express clinic. Owners expect that this venture will generate a 25% return and will require the reinvestment of $100M. 

• What is the ‘g’ 

• What is the post investment value of Local pharmacy and explain why

Answer rating: 100% (QA)

Solution aCalculation of Value of local pharmacy V... View the full answer