Riptide Inc., a swimwear company, is considering acquiring a string of Beachtime Inc., a retail store chain. The merger will allow both firms to benefit: Riptide has a new outlet to showcase its swimwear and Beachtime improves its retail offerings. As a result, the combined firm will generate $ 5 million in additional after-tax cash flows next year, growing 2% a year in perpetuity after that. You are given the cost of equity and capital for both companies individually and the combined company: Cost of equity Cost of capital Riptide 8.00% 7.00% Beachtime 12.00% 11.00% Combined 10.00% 9.00% What is the most that Riptide can pay for this synergy? Riptide Inc., a swimwear company, is considering acquiring a string of Beachtime Inc., a retail store chain. The merger will allow both firms to benefit: Riptide has a new outlet to showcase its swimwear and Beachtime improves its retail offerings. As a result, the combined firm will generate $ 5 million in additional after-tax cash flows next year, growing 2% a year in perpetuity after that. You are given the cost of equity and capital for both companies individually and the combined company: Cost of equity Cost of capital Riptide 8.00% 7.00% Beachtime 12.00% 11.00% Combined 10.00% 9.00% What is the most that Riptide can pay for this synergy