I figured out Part A but I can't figure out part B:

A. Surf & Turf Hotels is a mature business, although it pays no cash dividends. Next years earnings are forecasted at $56 million. There are 10 million outstanding shares. The company has traditionally paid out 50% of earnings by repurchases and reinvested the remaining earnings. With reinvestment, the company has generated steady growth averaging 5% per year. Assume the cost of equity is 12%.

Earnings per share / Ke - g = Stock price

(56/10)/(.12-.05)=80.0

Thus, the value of S & T per share price as per DCF model is $80

B. Now Surf & Turf s CFO announces a switch from repurchases to a regular cash dividend. Next years dividend will be $2.80 per share. The CFO reassures investors that the company will continue to pay out 50% of earnings and reinvest 50%. All future payouts will come as dividends, however. What would you expect to happen to Surf & Turf s stock price?