The Cycle Stop has 1,600 shares outstanding at a market price per share of $8.48.Kate's Wheels has 1,750 shares outstanding at a market price of $13 a share.Neither firm has any debt.Kate's Wheels is acquiring The Cycle Stop for $15,000 in cash.What is the merger premium per share?
A)$0.27
B)$0.46
C)$0.90
D)$1.43
E)$2.52

Question

Quizplus · Accepted Answer

Merger premium per share = ($15,000/1,600) - $8.48 = $0.90

The Cycle Stop Has 1,600 Shares Outstanding at a Market