Imprudential, Inc., has an unfunded pension liability of $600million that must be paid in 24...

Imprudential, Inc., has an unfunded pension liability of $600 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 8.0 percent, what is the present value of this liability?

$96,511,994
$87,050,034
$92,727,210
$94,619,602
$107,343,999

Expert Solution

Present value = Future value/(1+r)^t

future value =	600 mil
r=	8%
t=	24%



Present value =	$ 94,619,602
600000000/(1+8%)^24

Ans =	$ 94,619,602

jeff jeffy answered 2 years ago

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