Compost Science, Inc. (CSI) is in the business of converting Bostons sewage sludge into fertilizer....

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Finance

Compost Science, Inc. (CSI) is in the business of converting Bostons sewage sludge into fertilizer.
The firm generates a 10% book return on equity. At the end of the year, CSI is expected to generate
earnings per share of $6.67. The firm plans to retain 80% of its earnings in order to grow in each of
the next 5 years. After this period, the firm plans to pay out 60% of its earnings in dividends. The
required return on the stock equals 8%. Based on this information, determine the value per share of
Compost Science. And what would be the firms forward P/E ratio?

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