Sunburn sunscreen has a zero coupon bond issue outstanding


Equity as an Option: Sunburn Sunscreen has a zero coupon bond issue outstanding with a $21,000 face value that matures in one year. The current market value of the firm's assets is $21,000. The standard deviation of the return on the firm's assets is 34 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?

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Financial Management: Sunburn sunscreen has a zero coupon bond issue outstanding
Reference No:- TGS01115226

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