KFC just paid $ 2 dividend yesterday . In its forecast , the company's CFO expects that Earnings per Share for the coming 3 years would be $ 3 ; $ 4.2 ; and $ 5 , respectively ; The company would pay out 80 % of earnings as dividends for these 3 years . Company's stockholders require a return of 11 % . After that , KFC is to expand into a new line of product , which would boost earnings growth to 7 % annually for the foreseeable future . To finance the new product line , KFC would need to cut its dividend payout ratio from 80 % to 50 % . Assume that the stockholders ' required return and number of shares outstanding remains unchanged . What would be the current price of KFC's stock ?