Use the information for the$$ question$($s$)$ below.

Luther Industries has$$ $$5$ million in excess cash and $1$ million shares outstanding. Luther is considering investing the cash in oneyear treasury bills that are currently paying$5\%$ interest, and then using the cash to pay a dividend next year.$$ Alternatively, Luther can pay the cash out as a dividend immediately and the shareholders can invest in the treasury bills themselves. Assume that capital markets are perfect.

In$2018,$ Luther Incorporated paid a special dividend of$$ $$5$ per share for the $100$ million shares outstanding. If Luther has instead retained that cash permanently and invested it into treasury bills earning$5\%,$ then the present value of the additional taxes paid by Luther would be closest$$ to:

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Part $1$

A$.$

$$$$290$ million.

B$.$

$$$$105$ million.

C$.$

$$$$585$ million.

D$.$

$$$$35$ million.