BORROWING AND CREDIT AGREEMENTS

Following is a summary of the Company's borrowings as of the respective balance sheet dates.

In millions Dec. $31,2016$ Dec. $31,2015$

Commercial paper $$253\mathrm{.}4$ $$885\mathrm{.}6$

$5\mathrm{.}625\%$ senior notes due $2017300300$

$3\mathrm{.}875\%$ senior notes due $2018300300$

$4\mathrm{.}0\%$ senior notes due $2020650650$

$4\mathrm{.}875\%$ senior notes due $2025550550$

$8\mathrm{.}52\%$ ESOP notes due $2019114140\mathrm{.}9$

Mortgage notes payable $2114\mathrm{.}8$

Capital lease obligations $0\mathrm{.}70\mathrm{.}8$

$2,189\mathrm{.}12,842\mathrm{.}1$

Less:

Short$-$term debt $(253\mathrm{.}4)(885\mathrm{.}6)$

Current portion of long$-$term debt $(341\mathrm{.}6)(30\mathrm{.}6)$

$$1,594\mathrm{.}1$ $$1,925\mathrm{.}9$

CVS also discloses the following information.

Interest expense, net$$Interest expense was $$117\mathrm{.}0$ million, $$64\mathrm{.}4$ million and $$53\mathrm{.}9$ million, and interest income was $$6\mathrm{.}5$ million, $$5\mathrm{.}7$ million and $$5\mathrm{.}8$ million, in $2016,2015$ and $2014,$ respectively. Interest paid totaled $$135\mathrm{.}9$ million in $2016,$ $$70\mathrm{.}4$ million in $2015$ and $$64\mathrm{.}9$ million in $2014.$

What is the average coupon rate $($interest paid$)$ and the average effective rate $($interest expense$)$ on CVS$\text{'}$ long$-$term debt? $($Hint: Use the disclosure for interest expense, net.$)$

Select one:

A$.$

Coupon Rate: $5\mathrm{.}40\%$ Effective Rate: $4\mathrm{.}65\%$

B$.$

Coupon Rate: $5\mathrm{.}02\%$ Effective Rate: $6\mathrm{.}12\%$

C$.$

Coupon Rate: $4\mathrm{.}81\%$ Effective Rate: $4\mathrm{.}80\%$

D$.$

Coupon Rate: $5\mathrm{.}20\%$ Effective Rate: $5\mathrm{.}03\%$