Robert Henry is on the board of directors of the Hampshire Tour Company, and Hampshire has announced its plan to pay dividends of $400,000. Currently there are 200,000 shares outstanding, and the earnings per share are $5. It seems the stock could sell for $35 after the ex-dividend date. What if, instead of paying a dividend, the management decided to repurchase stocks?

a. What should be the repurchase price that is equivalent to the proposed dividend?