You have decided to use the Capitalization of Excess Earnings method to value a small Veterinarian office,
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Question:
You have decided to use the Capitalization of Excess Earnings method to value a small Veterinarian office, and you have asked the Veterinarian to assist you in determining what is important to her clientele. She said about 40% of her business is due to the strong interpersonal relationship she has with her clients, and the other 60% is due to the great staff she employs. What Goodwill capitalization rate would you use when employing the Capitalization of Excess Earnings method to value the business. Group of answer choices
42.5%
45.0%
40.0%
37.5%
Expert Answer:
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