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Playaz.com Inc., a social networking website, just sold a bond with 40 warrants attached. The bonds have a 12-year term to maturity and a semi-annual

Playaz.com Inc., a social networking website, just sold a bond with 40 warrants attached. The bonds have a 12-year term to maturity and a semi-annual coupon of 3.35%. The bonds trade at a premium of 101.45. The yield to maturity on similar straight bonds is currently 5.85%. What is the implied value of each warrant?

a. $0.3625

b. $0.625

c. $5.34

d. $5.70

e. $6.25

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