Drongo Corporation's $4-$year bonds currently yield $6\mathrm{.}3$ percent and have an inflation premium

of $2\mathrm{.}5\%.$ The real risk$-$free rate of interest, $r^{**},$ is $2$ percent and is assumed to be constant.

The maturity risk premium $($MRP$)$ is estimated to be $0\mathrm{.}1\%(t-1),$ where $t$ is equal to the time to

maturity. The default risk and liquidity premiums for this company's bonds total $1\mathrm{.}5$ percent

and are believed to be the same for all bonds issued by this company. If the average inflation

rate is expected to be $1\mathrm{.}8$ percent for years $5,6,$ and $7,$ what is the yield on a $7-$year bond for

Drongo Corporation?

$6\mathrm{.}80\%$

$6\mathrm{.}30\%$

$7\mathrm{.}80\%$

$7\mathrm{.}30\%$

$8\mathrm{.}30\%$