The Martin Co$.$ is considering the acquisition of Ramaswami

Inc. Last year Ramaswami generated cash flows of

$$35,000,000.$ The managers of The Martin Co$.$ feel that

$9\mathrm{.}00\%$ is a reasonable discount rate for the cash flows of

Ramaswami and that the cash flows of the firm will probably

grow at $1\mathrm{.}50\%$ into the future. The Martin Co$.$ managers

also think that the union with Ramaswami will generate

perpetual annual synergies of $$4,800,000.$ Based on these

assumptions, what is a reasonable price to pay for

Ramaswami?

$$712,272,727$

$$605,256,410$

$$714,480,519$

$$865,793,651$

$$606,538,462$