Mark Todd Corporation has two recent bond currently outstanding. Bond X has a face value of RM 45,000 and matures in 14 years. The bond makes no payments for the first six years, then pays RM 1,350 every six month over the subsequent nine years, and finally pays RM 1,650 every six months over the last eight years. Bond M also has a face value of RM34,000 and a maturity of 30 years; it makes no coupon payments over the life of the bond. If the required rate of return on both of these bonds is 14 percent compounded semiannually,

a) what is the current price of bond X and M?

b) Why an income bond is attractive to a corporation with volatile cash flows?

c) Why income bonds are no more popular?