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Dollar stores are no bargain for investors Add to ...

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The business of selling cheap merchandise to poor people is getting more and more expensive.

Dollar General Corp.’s $9-billion (U.S.) cash bid for Family Dollar Stores Inc. trumps Dollar Tree Inc.’s $8.5-billion offer, made three weeks ago. It values Family Dollar at nearly 10 times its earnings before interest, taxes, depreciation and amortization (EBITDA) – a sweet price indeed for a retailer that is struggling to maintain growth.

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