Imprudential, Inc., has an unfunded pension liability of $750 million that must
ID: 2681556 • Letter: I
Question
Imprudential, Inc., has an unfunded pension liability of $750 million that must be paid in 25 years. To assess the value of the firms stock, financial analysts want to discount this liability back to the present.Required:
If the relevant discount rate is 8 percent, what is the present value of this liability? (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567). Round your answer to 2 decimal places (e.g., 32.16).)
Explanation / Answer
given n=25 yrs , r =8% PV = 750 million/(1+0.08)^25 = $109513428.7 as it should be written in dollars convert million to dollars as 1 million = 10^6 dollars