Firm A is considering a merger with Firm B. Based on the following data, what is the synergy gain from the merger?

Firm A:

Market value of debt: $2 million

Market value of equity: $4 million

Number of shares: 0.2 million

Estimated total firm value based on value-based management model if the merger takes place: 9 million

Firm B:

Market value of debt: $5 million

Market value of equity: $6 million

Number of shares: 0.5 million

Estimated total firm value based on value-based management model if the merger takes place: 15 million

Select one:

a. $7.5 million

b. $7 million

c. $7.9 million

d. $6.7 million

e. $5.1 million