Owen has discussed with two advisors the possibility of selling his half of the firm. Since KF is not publicly traded, the market value of the company's stock must be estimated. The consultants believe that KF is worth between $35 and $40 per share, figures that appear reasonable to Owen.

Is the estimate of $35 to $40 for Owen's shares a fair evaluation?

Please explain why

EXHIBIT C2.1 KF Income Statements: 2012-2013 Sales Cost of goods sold Gross margin Administrative Depreciation Interest 2012 $6,572,800 4,896,700 $ 1,676,100 1,281,700 72,000 37,900 Earnings before interest and taxes $ 322,400 Earnings before taxes Taxes (at 40%) Net income $ 284,500 113,800 $ 170,700 2013 $7,811,500 5,866,200 $1,945,300 1,492,200 86,000 $ 367,100 31,600 $ 335,500 134,200 $ 201,300