Business Valuation ( Tricky)

Kennaugh Co is looking to take over another company, Kewley Co, and so needs to value Kewley Co in order to put together a takeover bid. It has gathered the following information.

Kewley’s Co’s earnings last year were $460,000, but this was after a deduction for a one off bad debt of $50,000 as well as having paid what the directors of Kennaugh Co believe to be an excessive salary of $250,000 to the managing director. If the takeover proceeds, this managing director will retire to be replaced with an individual from Kennaugh Co at a salary of $140,000. Earnings are otherwise anticipated to grow at a rate of 3.5% and the earnings yield figure for Kewley Co is currently 13%

Calculate, using earnings yield, a valuation for Kewley Co from the information above?

Valuation is Earnings/Earnings yield right. But what is all extra figures about? What is it checking on… Do they have one Managing director or smth.. SO CONFUSING…

Please help sir.