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Sunburn Sunscreen has a zero coupon bond issue outstanding with a $20,000 face value that matures in one year. The current market value of the
Sunburn Sunscreen has a zero coupon bond issue outstanding with a $20,000 face value that matures in one year. The current market value of the firms assets is $23,200. The standard deviation of the return on the firms assets is 27 percent per year, and the annual risk-free rate is 6 percent per year, compounded continuously.
Based on the BlackScholes model, what is the market value of the firms equity and debt?(Round your answers to 2 decimal places. (e.g., 32.16))
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