Question: Sunburn Sunscreen has a zero coupon bond issue outstanding with a $10,000 face value that matures in 2 years. The current market value of the

Sunburn Sunscreen has a zero coupon bond issue outstanding with a $10,000 face value that matures in 2 years. The current market value of the firm's assets is $18,000. The standard deviation of the return on the assets is 40 percent per year, and the annual risk-free rate is 4 percent per year, compounded continuously. What is the market value of the firm's debt based on the Black-Scholes model? (Round your answer to the nearest $100.) A. $6, 415.30 B. $6, 900 C. $8, 300 D. $8, 800 E. $9, 800

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