Use the Information for the Question(s)below

Multiple Choice

Use the information for the question(s) below.
Consider the following tax rates:

-In 2006,Luther Incorporated paid a special dividend of $5 per share for the 1 million shares outstanding.If Luther has instead retained that cash permanently and invested it into Treasury bills earning 6%,then the present value (PV) of the additional taxes paid by Luther would be closest to:

A) $.35 million
B) $2.90 million
C) $1.75 million
D) $5.85 million
E) $3.25 million