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- Imprudential, Incorporated, has an unfunded pension liability of $757 million that must be paid in 20 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 10 percent, what is the present value of this liability? Note: 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 valueABC, Inc., has an unfunded pension liability of $554 million that must be paid in 16 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 8.01 percent, what is the present value of this liability? Answer in $ millions to two decimals-ie, if you get 12,345,678 dollars, you should enter 12.34.Imprudential, Inc., has an unfunded pension liability of $582 million that must be paid in 20 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 7.5 percent, what is the present value of this liability?
- Imprudential, Incorporated, has an unfunded pension liability of $430,000 that must be paid in 10 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 5.6 percent, what is the present value of this liability?Imprudential, Incorporated, has an unfunded pension liability of $850 million that must be paid in 22 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 9.5 percent, what is the present value of this liability?Imprudential, inc., has an unfounded pension liability of $600 million that must be paid in 16 years. To assess the value of the firms stock, financial analysts went to discount this liability back to the present. If the relevant discount rate is 7.0 percent, what is the present value of this liability.
- If iOS Corp. issues an additional $8 million of debt and uses this money to retire common stock, what will be the expected return on the stock? Assume that the change in capital structure does not affect the risk of the debt, and recall that the WACC under the initial capital structure is 13.85%. Enter your answer as a percentage. Do not include the percentage sign in your answer. Enter your answer rounded to 2 DECIMAL PLACES. TE= Number Click "Verify" to proceed to the next part of the question.Fields & Company expects its EBIT to be $107,000 every year forever. The company can borrow at 7 percent. The company currently has no debt and its cost of equity is 11 percent. The tax rate is 21 percent. The company borrows $162,000 and uses the proceeds to repurchase shares. a. What is the cost of equity after recapitalization? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of equity b. WACC % %Suppose Caterpillar's defined-benefit pension plan offers a retirement benefit tied to years of service and final salary (like most DB plans) and that the retirement benefit is further increased by a fixed 3% per year each year. Caterpillar plans to change the retirement-plan formula so the amount of the retirement benefit increase is positively correlated to how Caterpillar's stock has performed (rather than the fixed 3% rate). This change in the retirement-benefit formula will cause the appropriate discount rate for the DB plan benefit to: Decrease Stay the same Increase
- In calculating insurance premiums, the actuarially fair insurance premium is the premium that results in a zero NPV for both the insured and the insurer. As such, the present value of the expected loss is the actuarially fair insurance premium. Suppose your company wants to insure a building worth $390 million. The probability of loss is 1.29 percent in one year, and the relevant discount rate is 3.1 percent. a. What is the actuarially fair insurance premium? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. Suppose that you can make modifications to the building that will reduce the probability of a loss to .80 percent. How much would you be willing to pay for these modifications? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) a. Insurance premium b. Maximum costFields & Company expects its EBIT to be $91,000 every year forever. The firm can borrow at 7 percent. The company currently has no debt, and its cost of equity Is 12 percent and the tax rate is 22 percent. The company borrows $150,000 and uses the proceeds to repurchase shares. a. What is the cost of equity after recapitalization? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g.. 32.16.) b. What is the WACC? (Do not round Intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Cost of equity b. WACC 28 29 % %Maurer, Inc., has an odd dividend policy. The company has just paid a dividend of $4 per share and has announced that it will increase the dividend by $6 per share for each of the next five years, and then never pay another dividend. If you require a return of 10 percent on the company's stock, how much will you pay for a share today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price