(Question 5) (a) VDSL Network Sdn Bhd had sold a bond that issued with 15 warrants attached. The bond has 15 years maturity period with 9 percent annual coupon rate at RM1,000 of par value. The current yield on similar straight bonds is 12 percent. Calculate the value of each warrant. (4 marks) 4/6 (b) Packet One Networks is an internet service provider company. Currently, the company announces to sell a one year call option. The share price is RM57 and the strike price is RM53. The risk-free rate is 12 percent per annum and the volatility is 10 percent. Calculate the value of call option. (9 marks) (c) Mr.Shahrul Affendy had been appointed to lead the finance team of Extreme Broadband Corporation. The team is required to advise the board on the investment project that should to be undertaken. The annual historical share prices for Maxis and Telekom Malaysia Berhad (TLMM) are as follows: Date Maxis (RM) TLMM (RM) 31/12/2015 5.32 3.82 31/12/2016 5.35 2.66 31/12/2017 6.01 6.30 31/12/2018 5.98 5.95 31/12/2019 6.80 6.78 As the leader for finance team, he is required to suggest on the preferable company to be invested based on the coefficient of variation for Maxis and Telekom Malaysia Berhad. (12 marks)