Let's break down the problem step by step: ## **Step 1: Timeline & Growth Phases** 1. **2022-2027:** - Earnings per share (EPS) = $5 (as of 12/31/2022) - **Earnings growth:** 16%/year for 5 years - **No dividends paid** during this period 2. **2027-2033:** - **Dividends begin:** 50% payout of earnings (starting 12/31/2027) - **Earnings growth:** 6%/year for 6 years 3. **2033 and beyond:** - **Dividend payout:** 80% of earnings - **Earnings growth:** 2%/year in perpetuity 4. **Required return (discount rate):** 10% --- ## **Step 2: Project Future Earnings and Dividends** ### **A. Calculate EPS at Each Key Date** #### **EPS at 2027 (after 5 years at 16% growth):** \[ EPS_{2027} = 5 \times (1 + .16)^5 = 5 \times (2.100946) = 10.50473 \] #### **Dividends at 2027:** \[ Dividend_{2027} = 10.50473 \times .5 = 5.252365 \] #### **EPS at 2033 (after 6 years at 6% growth):** \[ EPS_{2033} = 10.50473 \times (1 + .06)^6 = 10.50473 \times (1.418519) = 14.90722 \] #### **Dividends at 2033:** \[ Dividend_{2033} = 14.90722 \times .8 = 11.92578 \] --- ### **B. Dividends Timeline** - **2023-2026:** $ (no dividends) - **2027-2032:** 50% payout, div increases by 6%/year: - 2027: $5.252365 - 2028: $5.252365 \times 1.06 = $5.567507 - 2029: $5.567507 \times 1.06 = $5.901558 - 203: $5.901558 \times 1.06 = $6.255652 - 2031: $6.255652 \times 1.06 = $6.630991 - 2032: $6.630991 \times 1.06 = $7.028851 --- ## **Step 3: Find Terminal Value at 2033** From 2033 onward, dividend = $11.92578 and grows at 2%/year. \[ \text{Terminal Value}_{2033} = \frac{Dividend_{2033+1}}{r - g} \] \[ Dividend_{2034} = 11.92578 \times 1.02 = 12.16430 \] \[ \text{Terminal Value}_{2033} = \frac{12.16430}{.10 - .02} = \frac{12.16430}{.08} = 152.05375 \] --- ## **Step 4: Discount All Future Cash Flows to Present (2022)** Let’s discount dividends from 2027 to 2032 and (dividend + terminal value) in 2033 to present at 10%: \[ PV = \sum_{t=1}^{N} \frac{D_t}{(1+r)^t} + \frac{D_{N+1} + TerminalValue_{N+1}}{(1+r)^{N+1}} \] Where: - \( t = 5 \) to \( 10 \) (since first dividend is paid at end of 2027, 5 years from now) - \( r = .10 \) ### Discount Each Dividend: | Year | \( t \) | Dividend (\( D_t \)) | \( (1.10)^t \) | PV (\( D_t / (1.10)^t \)) | |------|---------|----------------------|----------------|---------------------------| |2027 | 5 | 5.252365 | 1.61051 | 3.26045 | |2028 | 6 | 5.567507 | 1.77156 | 3.14447 | |2029 | 7 | 5.901558 | 1.94872 | 3.02707 | |203 | 8 | 6.255652 | 2.14359 | 2.91815 | |2031 | 9 | 6.630991 | 2.35795 | 2.81731 | |2032 | 10 | 7.028851 | 2.59374 | 2.72487 | |2033 | 11 | 11.92578+152.05375=163.97953 | 2.85312 | 57.47679 | --- Sum all these present values: \[ PV_{total} = 3.26045 + 3.14447 + 3.02707 + 2.91815 + 2.81731 + 2.72487 + 57.47679 = 75.36911 \] --- ## **Final Answer (rounded to 2 decimal places):** \[ \boxed{75.37} \] --- ## **Current share price of CORONADO:** \[ \boxed{75.37} \] --- ### **Summary Table** | Year | Dividend | Discount Factor | PV | |------|----------|----------------|--------| |2027 | 5.252365 | 1.61051 | 3.26045| |2028 | 5.567507 | 1.77156 | 3.14447| |2029 | 5.901558 | 1.94872 | 3.02707| |203 | 6.255652 | 2.14359 | 2.91815| |2031 | 6.630991 | 2.35795 | 2.81731| |2032 | 7.028851 | 2.59374 | 2.72487| |2033 | 163.97953| 2.85312 | 57.47679| |**Total**| | |**75.37**| If you have any questions about any step, let me know!

# **Ohm's Law Explained** Ohm's Law is a fundamental principle in electrical engineering that relates voltage, current, and resistance in an electrical circuit. The formula is expressed as: \[ V = I \times R \] where: - \( V \) = Voltage (in Volts) - \( I \) = Current (in Amperes) - \( R \) = Resistance (in Ohms) ## **Given:** - Voltage (\( V \)) = 10 Volts - Current (\( I \)) = 2 Amperes ## **Step 1: Rearrange the Formula for Resistance** To find the resistance \( R \), we can rearrange the Ohm's Law formula: \[ R = \frac{V}{I} \] ## **Step 2: Substitute the Given Values** Substituting the known values into the formula: \[ R = \frac{10 \text{ V}}{2 \text{ A}} = 5 \text{ Ohms} \] ## **Final Answer** The resistance of the resistor is: \[ \boxed{5 \text{ Ohms}} \] If you have any further questions about Ohm's Law or related topics, feel free to ask!