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Drongo Corporatior's 3 -vear boods curnenth vieid 6,3 percent and have an inflation premium of 3.7% The real risk-free rate of interest. r, is 1

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Drongo Corporatior's 3 -vear boods curnenth vieid 6,3 percent and have an inflation premium of 3.7% The real risk-free rate of interest. r, is 1 percent and is assurned to be constint. The maturity risk premlum (MRP) is estimated to be 0.18(t - 1 ), where t is equat to the tirne to maturity. The default risk and inquidity premicums for this compacy's bonds total 1.4 percent and are befieved to be the same for all bonds issued by this company. If the average inflation rate is expected to be 3.1 percent for years 4 and 5 , what is the vield on a 5.vear bond for Drongo Corporation? 606% 6.46% 586% 6.26%

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