Question: Shimt's has only a zero coupon bond outstanding with a $8,000 face value that matures in 1 year. The current market value of the firm's

Shimt's has only a zero coupon bond outstanding with a $8,000 face value that matures in 1 year. The current market value of the firm's assets is $8,500. The standard deviation of the return on the firm's assets is 36 % per year, and the annual risk-free rate is 5 % per year, compounded continuously.

Based on the Black-Scholes model, what is the market value of Shiimt's equity?

Based on the Black-Scholes model, what is the market value of Shimt's debt?

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