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

question 4

Multiple Choice

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

---

Definitions:

Government Agencies

Organizations established by a governmental body to administer and implement specific legislation, policies, and functions.

Film Production

The process of making a film, encompassing creative and logistical aspects from initial story or concept through filming, editing, and release.

Film Distribution

The process of making a movie available to the audiences by theaters, streaming platforms, or other media outlets.

Vertical Integration

A business strategy where a company controls multiple stages of production or distribution within the same industry.