24. CSI converts Bostons sewage sludge to fertilizer. MDC (Metropolitan District Commission) has agreed to pay whatever amount is necessary to yield CSI a 10% book ROE. At the end of the year, CSI is expected to pay a $4 dividend. It has been reinvesting 40% of its earnings and growing at 4% per year. a. Suppose CSI continues this growth trend. What is the expected long-run rate of return from purchasing the stock at $100. What part of the $100 is attributable to the present value of growth opportunities? b. Now MDC announces a plan for CSI to treat Cambridge sewage. CSIs plant will be expected gradually over 5 years. This means that CSI will have to reinvest 80% for 5 years. Starting in year 6, CSI will again be able to pay out 60% if its earnings. What will be CSIs stock price once this announcement is made and its consequences for CSI are known?