The bonds of Jerrod's Welding, Inc. pay an 8% coupon, have a 7.98% yield to maturity and have a face value of $1,000. The current rate of inflation is 2.5%. What is the real rate of return on these bonds?

A.

5.32%

B.

5.35%

C.

5.37%

D.

5.42%

E.

5.48%