Valuing the Target Firm Zappa Inc. is considering acquiring the Jones Co. They are trying to estimate the value of the target firm. Recently, the Jones Co. reported cash flows of $15,000,000. The executives at Zappa Inc. estimate that the cash flows of the Jones Co. will grow at 4.50% in the future, and that 11.50% is a reasonable discount rate for these cash flows. The expect the merger to generate $3,500,000 per year into the future. 

Based on these assumptions, what is a reasonable price to pay for the Jones Co.?