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Transaction Costs

The following provides a definition and meaning for the term Transaction Costs:

Definition - the strict definition

In economics and related disciplines, a transaction cost is a cost incurred in making an economic exchange (restated: the cost of participating in a market).

Meaning - how it relates to pharmacy sales

For a pharmacy buyer, transaction costs will include (but are not limited to):

  • Legal fees for reviewing the Contract of Sale;
  • Accounting fees for the Due Diligence of the financial information;
  • Fees associated with the bank loans; and
  • Valuation/Finance fees.

For a vendor/seller, transaction costs can include:

  • Brokerage fees;
  • Legal/Accounting fees;
  • Loan payout fees; etc.

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