Zero coupon bond issue outstanding

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Sunburn Sunscreen has a zero coupon bond issue outstanding with a $28,000 face value that matures in one year. The current market value of the firm's assets is $29, 900. The standard deviation of the return on the firm's assets is 38 percent per year, and the annual risk-free rate is 5 percent per year, compounded continuously. Based on the Black-Scholes model, what is the market value of the firm's equity and debt? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Reference no: EM131620283

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