According to the Weston/Copeland model, what is the total synergy gain from the merger?

Firm A is considering a merger/acquisition with Firm B.

Firm A:

Market value of debt: $3 million

Market value of equity: $5 million

Number of shares: 0.2 million

Firm B:

Market value of debt: $5 million

Market value of equity: $5 million

Number of shares: 0.5 million

Investment rate for the combined firm (bA+B): 50%

WACC for the combined firm (WACCA+B): 10%

Total net operating income before synergy gain: (X): $4 million

Synergy rate (a): 5%

Corporate tax rate (T): 40%

Growth rate for the combined firm (g): 14.4%

Number of years for the growth: 10

Select one:

a. $46.09 million

b. $37.67 million

c. $43.76 million

d. $40.41 million