Herbal Gardens Has a Market Value of $380 While Veggies

Herbal Gardens has a market value of $380 while Veggies has a market value of $530.Veggies is merging with Herbal Gardens and expects the combined firm to have a market value of $950.If the current Herbal Garden shareholders obtain $400 of equity in the new firm,how much synergy was allocated to the Veggies shareholders?

A) $0
B) $20
C) $25
D) $15
E) $40

Correct Answer:

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