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Compost Science incorporated (CS) is in the business of converting Boston's sewage sludge into fertilizer. The business is not in itself very profinable. However, to induce CSI to romain in business, the Metropolitan District Commission (MDC) has agreed to pay whatever amount is necessary to yleid CSI a 11% book return on equity. At the end of the year, CSI is expected to pay a $3 dividend. it has been reinvesting 40% of earnings and growing at 3% a year. a-1. Suppose CSI continues on this growth trend. What is the expected long-run rate of return from purchasing the stock at $1007 Note: Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number. a-2. What part of the $100 price is attributable to the present value of growh opportunities? Note: Do not round intermediate calculations, Pound your answer to 2 decimal places. b. Now the MOC announces a plan for CSI to treat Cambridge spwage. CSr's plant wall therefore, be expanded gradually over tive years. This means that CSI wil have to reirvest 80% of its earnifos for five years. Starting in year 6 , howevec, it will again be able to pay out 60% of earnings. What win be CSrs stock price once this announcement is made and its conseguences for CSi are known? Note: Do not round intermediate calculations. Round your answer to 2 decimal places

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