K1. Imprudential, Incorporated, has an unfunded pension liability of $757 million that must be paid in 20 years. To assess the value of thefirm's stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 10 percent, what is thepresent value of this liability?Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimalplaces, e.g., 1,234,567.89.

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Answered: Imprudential, Incorporated, has an…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Imprudential, Inc., has an unfunded pension liability of $400 million that must be paid in 24 years. To assess the value of the firm’s stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 7.3 percent, what is the present value of this liability? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., 1,234,567.89)
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Imprudential, Inc., has an unfunded pension liability of $579 million that must be paid in 25 years. To assess the value of the firm’s stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 7.2 percent, what is the present value of this liability? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to 2 decimal places, e.g., 1,234,567.89) Present value = $
Imprudential, Inc., has an unfunded pension liability of $768 million that must be paid in 15 years. To assess the value of the firm's stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 7 percent, what is the present value of this liability? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Present value $ 146,018,959.32
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The PBO was $100 million at the beginning of the year and $114 million at the end of the year. At the end of the year, pension benefits paid by the trustee were $6 million and there were no pension-related OCI account. The actuary's discount rate was 5%. What was the amount of the service cost for the year? (Enter your answer in million, round to the nearest million, without dollar sign, ex. 123 or -123).
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