(a) Explain TWO(2) features of corporate bonds as a long-term debt instrument. (8 marks)

(b) Milkot Berhad issues a 15-year bond of RM1,000 that pays RM85 annually. The market price for the bond is RM960. Your required rate of return is 9%. Calculate the following:

(i) What is the value of the bond to you? (3 marks)

(ii) What is the value if your required rate of return increases to 11%? (3 marks)

(iii) What will be the value if your required rate of return decreases to 7%? (3 marks)

(iv) Based on (ii) & (iii) above, under which circumstances should you purchase the bond. (3 marks)