Question: Sunburn Sunscreen has a zero coupon bond issue outstanding with a face value of $10,000 that matures in one year. The current market value of
| Sunburn Sunscreen has a zero coupon bond issue outstanding with a face value of $10,000 that matures in one year. The current market value of the firms assets is $11,900. The standard deviation of the return on the firms assets is 28 percent per year, and the annual risk-free rate is 4 percent per year, compounded continuously. |
| Based on the BlackScholes model, what is the market value of the firms equity and debt? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) |
| Market value | |
| Equity | $ |
| Debt | $ |
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