Sunburn Sunscreen has a zero coupon bond issue outstanding with a $11,000 face value that matures in one year. The current market value of the firm's assets is $11,400. The standard deviation of the return on the firm's assets is 39 percent per year, and the annual risk-free rate is 6 percent per year, compounded continuously.

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

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