Question: Sunburn Sunscreen has a zero coupon bond issue outstanding with a $30,000 face value that matures in one year. The current market value of the
Sunburn Sunscreen has a zero coupon bond issue outstanding with a $30,000 face value that matures in one year. The current market value of the firm's assets is $31,800. The standard deviation of the return on the firm's assets is 36 percent per year, and the annual risk-free rate is 4 percent per year, compounded continuously.
Based on the Black-Scholes model, what is the market value of the firm's equity and debt?(Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
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