Yesterday, Macallan Corp paid out $1.7308B in dividends and repurchased $4.3983B worth of shares. Macallan has 1.12B shares outstanding and pays all of its dividends and makes its repurchases at the end of each year. Because of the slow-down in the economy, analysts expect that next year Macallan will hold dividend payments constant at yesterdays level and cancel its stock repurchase program. Two years from now, analysts forecast that total payouts will return to the level of yesterday. After that date analysts expect that total payouts will grow at an annual rate of 2% in perpetuity. Assume that investors require a 10% rate of return on Macallans shares. Which of the following is closest to the Total Payout Model estimate of the stock price today?

A) $58

B) $60

C) $62

D) *$64

E) $66

Looking for the process work to understand why the solution is D) $64.