Redwater is considering acquiring Bluewater. Redwater has 10 million shares outstanding, with a share price of $20 and earnings per share of $2. Bluewater has 4 million shares outstanding, with a share price of $15 and earnings per share of $1.25. The acquirer will pay $17 cash for each of the targets shares. Redwater expects this transaction to bring synergies worth $40 million. Immediately after the announcement of this transaction, the price per share of Redwater will be closest to:

a.

$15.90.

b.

$17.20.

c.

$21.60.

d.

$23.10.