Use the Following Information to Answer the Question(s)below

Multiple Choice

Use the following information to answer the question(s) below.Consider the following information regarding corporate bonds:
-Wyatt Oil has a bond issue outstanding with seven years to maturity,a yield to maturity of 7.0%,and a BBB rating.The corresponding risk-free rate is 3% and the market risk premium is 5%.Assuming a normal economy,the expected return on Wyatt Oil's debt is closest to:

A) 3.0%.
B) 3.5%.
C) 4.9%.
D) 5.5%.