Capitol Stores and The Back Corner are all-equity firms. Capitol Stores has 1,750 shares outstanding at a market price of $18.40 a share. The Back Corner has 2,100 shares outstanding at a price of $34 a share. The Back Corner is acquiring Capitol Stores for $34,900 in cash. What is the merger premium per share?

A) $0.46
B) $0.89
C) $1.54
D) $1.65
E) $2.00

Shares Outstanding

The total number of shares of a company's stock that are currently owned by all its shareholders, including shares held by institutional investors and restricted shares owned by company insiders.

Market Price

The current market value at which one can buy or sell services or assets.

Merger Premium

The excess amount that an acquiring company pays over the market value of the shares of the company it is buying.