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Equity as an Option. Sunburn Sunscreen has a zero coupon bond issue outstanding with a $ 1 0 , 0 0 0 face value that
Equity as an Option. Sunburn Sunscreen has a zero coupon bond issue outstanding with a $ face value that matures in one year. The current market value of the firm's assets is $ The standard deviation of the return on the firm's assets is percent per year, and the annual riskfree rate is percent per year, compounded continuously. Based on the BlackScholes model, what is the market value of the firm's equity and debt? Solve using Excel.
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