What is the value of the company using a P/E valuation?

A company is owned by its five directors who want to sell the business.

Current profit after tax is $750,000.

The directors are currently paid minimal salaries, taking most of their incomes as dividends.

After the company is sold, directors’ salaries will need to be increased by $50,000 each year in total.

A suitable Price/Earnings (P/E) ratio is 7, and the rate of corporate tax is 20%.

What is the value of the company using a P/E valuation?
A . $4,900,000
B . $5,250,000
C . $5,530,000
D . $4,970,000