Benny's Food, a local food chain, is evaluating purchasing a competitor, Foundry Food. Benny's Food projects that the merger is expected to result in combined incremental free cash flows and interest tax savings of $25.75 million (present value). It has been determined that the appropriate discount rate for valuation is 12%. Foundry has 1.5 million shares outstanding and no debt. Foundry's current price is $15.25. What is the maximum price per share that Benny's should offer?

Select one:

a.

$16.25

b.

$16.97

c.

$17.17

d.

$18.13

e.

$18.88