Both Firms Are 100% Equity-Financed

Both firms are 100% equity-financed. Firm A can acquire firm B for $82,500 in the form of either cash or stock. The synergy value of the deal is $12,500. What is the value of the new firm if firm B's stockholders are paid in stock?

A) $255,000
B) $262,500
C) $337,500
D) $650,000
E) $672,525