An analyst evaluating securities has obtained the following information. The real risk-free rate of interest is 3% and is expected to remain constant for the next 5 years. Inflation is expected to 3% and is expected to remain constant for the next 5 years. The maturity risk premium is estimated to be 0.15*(t-1) % , where t = number of years to maturity. The liquidity premium on relevant 5-year securities is 0.50% and the default risk premium on relevant 5-year securities is 0.89%. What is the yield on a 5-year corporate bond (r_C5)?

4.99%

7.99%

8.14%

7.49%