Frostbite Thermalwear has a zero coupon bond issue outstanding with a face value of $42,000 that matures in one year. The current market value of the firm's assets is $45,600. The standard deviation of the return on the firm's assets is 36 percent per year, and the annual risk-free rate is 6 percent per year, compounded continuously.

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

What is the firm's continuously compounded cost of debt?