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Distinct Wines Importers is looking at acquiring Wine Tasting Adventures in an all cash deal. Distinct Wines has 2 1 0 , 5 0 0

Distinct Wines Importers is looking at acquiring Wine Tasting Adventures in an all cash deal. Distinct Wines has 210,500 shares outstanding at $54 per share and Wine Tasting Adventures, a private company, has expected annual cash flows of $290,000 per year (forever). Both firms have a 9% cost of capital. Distinct Wines anticipates that with their marketing & sales expertise, they would be able to increase the target's annual cash flows by 5% annually if the firms combine. What is the maximum cash price Distinct Wines should offer?
$3,222,222
$7,294,611
$3,383,333
$11,367,000
$5,800,000
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