The Micro Management Corporation (MMC) currently operates as a cash cow, i.e., it pays out all its earnings as dividends. Based on your expectation that MMC has good investment opportunities, allowing the firm to earn a 12% return on retained earnings (ROIC) every year, you suggest the firm should reduce its dividend pay-out ratio to a new level of 60% starting at t=1. Current earnings (t=0) are $240,000 and the corporation has 40,000 shares outstanding.

If the required rate of return on the stock is 10%, what is the net present value of the growth opportunities per share (NPVGO) for MMC?

A. 8.39

B. 69.23

C. 23.38

D. 25.71

E. 9.23

Notes: If possible, please provide the formulas and steps. Our class doesn't use a financial calculator either - only using time value of money math. Thank you!