The Dunn Corporation is planning to pay dividends of $ 500,000. There are 250,000 shares outstanding, and earnings per share are $ 5. The stock should sell for $ 50 after the ex- dividend date. If, instead of paying a dividend, the firm decides to repurchase stock.

Please answer the following question:

Question 1: What should be the repurchase price?

Question 2: How many shares should be repurchased?

Question 3: What if the repurchase price is set below or above your suggested price in part ( a)?

Question 4: If you own 100 shares, would you prefer that the company pay the dividend or repurchase stock?

Note: Please provide through step by step calculations.