Jenny is an investment banker in HH bank in Malaysia. Recently, one of her large corporate client, WC Bhd has come to her and asking for help in deciding on the best market to place a sizeable issue of bonds. She could try to issue RM denominated bonds, or Euro or yen denominated bonds. She could also issue in the Malaysia or overseas. Besides that, WC Bhd is considering to invest two types of bonds, namely bond A and bond B. These two bonds have 10 years to maturity and payable semi-annually, par value of RM1,000 and a yield to maturity of 8% per annum. Bond A is a zero-coupon bond whereas bond B has a coupon rate of 9% per annum.

Required:

1. Describe FOUR (4) major factors should Jenny consider in advising her client on where to market the issue? (16 marks)

2. Calculate the price and current yield of bond A and bond B. (9 marks)