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Sunburn Sunscreen has a zero coupon bond issue outstanding with a face value of $10,000 that matures in one year. The current market value of
Sunburn Sunscreen has a zero coupon bond issue outstanding with a face value of $10,000 that matures in one year. The current market value of the firm's assets is 10,600. The standard deviation of the return on the firm's assets is 32 percent per year, and the annual risk-free rate is 7 percent per year, compounded continuously. what are the market values of the firm's equity and debt based on the black-scholes model? Use" risk-free bond- put option" to find out the value of debt
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