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S&C Co. has a zero coupon bond issue outstanding with a face value of $20,000 that matures in one year. The current market value of the firm's assets is $23,000. The standard deviation of the return on the firm's assets is 52 percent per year, and the annual risk-free rate is 6 percent per year, compounded continuously. What is the firm's continuously compounded cost of debt?

d d -.76 Nid) 8051 8106 8150 8212 -3.00 -2.95 -2.90 -2.85 -2.80 -2.75 -2.70 -2.65 -2.60 -255 -2.50 Nid) 2236 2297 2358 2420 2483 2546 -72 -.70 -68 -06 -64 8264 2611 Nid) .0013 .0016 0019 0022 0026 0030 0035 .0040 0047 0054 ,0062 0071 0082 0094 0107 0122 0139 0158 0179 0202 0228 0239 0250 - 60 - 58 --56 -1.58 -1.56 -1.54 -1.52 -1.50 -1.48 -1.46 -1.44 -1.42 -1.40 -1.38 - 1.36 - 134 -1.32 -1.30 -1.28 - 126 -124 -1.22 - 120 - 1.18 -1.16 06 08 10 .12 14 .16 .18 20 22 24 26 28 30 Nid) 0571 0594 0618 0643 0668 0694 0721 0749 0778 0808 .0838 0869 0901 0934 0968 1003 1038 1075 1112 .1151 .1190 1230 1271 1314 .1357 .1401 Nd) 5239 5319 5398 5478 5567 5636 5714 5793 5871 5948 6026 6103 6179 6255 6331 6406 8480 6554 6628 6700 6772 d .86 .88 90 92 94 96 98 1.00 1.02 1.04 1.00 1.08 1.10 1.12 1.14 1.16 1.18 1.20 1.22 1.24 1.26 1.28 1.30 1.66 1.68 1.70 1.72 1.74 1.76 1.78 1.80 1.82 1.84 1.86 1.80 1.80 1.92 1.94 1.96 1.98 2.00 2.05 2.10 2.15 2.20 2.25 -52 -2.40 -2.35 --230 -2.25 -220 -2.15 -2.10 -205 -2.00 -1.98 -1.96 -48 - 46 Nid) 9515 9535 9554 9573 9591 9008 9625 9641 9656 9671 .9686 9099 9713 9726 9738 9750 9761 9772 .9798 9821 9842 9861 9878 9893 9908 9918 - 38 - 36 -34 5844 8315 8365 8413 3461 8508 8554 8599 8643 8686 8729 8770 8810 8849 8888 8925 8982 8997 9032 9066 9099 9131 9162 9192 9222 9251 9279 9306 9332 9357 9382 9406 9429 9452 9474 9495 - 30 2676 2743 2810 2877 29:46 3015 3085 3156 3228 3300 3372 3446 3520 3594 3669 3745 3921 3897 3974 4052 4129 4207 4286 4354 4443 4522 4602 4681 4761 4840 4920 5000 5080 5160 2.30 - 1.12 -1.10 -1.08 -100 -1.04 -1.02 -1.00 34 36 38 40 42 44 46 48 50 52 54 56 58 80 82 64 66 38 70 72 .74 -26 -24 - 22 - 20 - 98 1.92 -1.90 -1.88 -1.86 -1.84 -1.82 -1.80 -1.78 -1.76 -1.74 -1.72 -1.70 -1.68 -1.86 -1.64 -1.62 -1.60 -.16 -14 .0274 0287 0301 0314 .0329 0344 0359 0375 0392 0409 .0427 0446 0455 0485 0505 0528 0548 6915 6985 7054 .7123 7190 7257 7324 7389 7454 .7518 7580 7642 -7704 -7764 7823 7881 7939 .7995 1.34 1.36 1.38 1.40 1.42 1.44 1.46 1.48 1.50 1.52 1.54 1.56 1.58 1.60 1.62 1.64 1492 1539 1587 1635 1685 1738 1788 -1841 .1894 1949 2005 2061 2119 2177 2.35 2.40 2.45 2.50 2.55 2.60 2.65 2.70 2.75 2.80 2.85 2.90 2.95 3.00 -12 - 94 - 92 - 90 -88 9938 .9946 9953 9900 9965 9970 9974 9978 9981 9984 9987 9989 - 36 -10 -08 -06 -04 --02 .00 .02 04 80 82 84 -82 -80 -78 3.05

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