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…

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?