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Please answer all parts of question 3 clearly and show steps of calculation if needed. Appreciate it. Question 3 [It] marks) Super Chicken Sdn Bhd

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Please answer all parts of question 3 clearly and show steps of calculation if needed. Appreciate it.

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Question 3 [It] marks) Super Chicken Sdn Bhd is a listed company that is the largest egg producer in Malaysia. It intends to expand its operations to Indonesia and is launching, in Singapore, a 10-year US$IUU million hand issue at a coupon rate of LIBDR + 8%. The bond will be collateralised by the assets of It] farms in Malaysia as well as the assets of It) farms that will be developed in two years in Indonesia. As the bond analyst for the Singapore Bond Fund, you have been instructed to look into the merits and demerits of the bond issue. {a} Explain what type of bond is the 10-year Superchicken US$ bond paying a coupon of LIBOR+8%? (2 marks) (b) Besides interest rate and reinvestment risks, distinguish and discuss 3 types of risks that a Singapore investor who invests in this bond faces. (12 marks) (c) Analyse the quality of the collateral that is attached to this bond. (6 marks}

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