Firm A currently has 40,000 shares of stock outstanding at a market price of $18 a share. Firm B has 12,000 shares outstanding at a price of $31 a share. Firm B is willing to be acquired by firm A at a price of $34 a share in cash. The incremental value of the proposed acquisition is estimated at $80,000. What is the value of firm AB if the merger is an all cash deal?

a

$640,000

b

$720,000

c

$764,000

d

$806,000

e

$1,172,000