At the beginning of the year Orchid Co.'s management is considering making an offer to buy Lily Corporation. Lily's projected operating income (EBIT) for the current year is $100 million, but Orchid believes that if the two firms were merged, it could consolidate some operations, reduce Lily's expenses, and raise its EBIT to $150 million. Neither company uses any debt, and they both pay income taxes at a 30% rate. Ham has a better reputation among investors, who regard it as better managed and also less risky, so Orchid's stock has a P/E ratio of 20 versus a P/E of 10 for Lily. Since Orchids's management will be running the entire enterprise after a merger, investors will value the resulting corporation based on Orchid's P/E. Based on expected market values, how much synergy should the merger create?

A $1500 million

B $1400 million

C $100 million

D $360 million