A Firm Is Considering Acquiring a Competitor

A firm is considering acquiring a competitor.The firm plans on offering $200 million for the competitor.The firm will need to issue new debt and equity to finance the acquisition.You estimate the issuance costs to be $10 million.The acquisition will generate an incremental free cash flow of $25 million in the first year and this cash flow is expected to grow at an annual rate of 3% forever.If the firm's WACC is 13%,what is the value of this project?

A) $40 million
B) $50 million
C) $60 million
D) $70 million