Time Industries wishes to issue a 10-year bond. The company currently has an 9-year, semiannual coupon bond outstanding with a 12% coupon rate that is trading at 113.60. There is no 9-year government bond to use as a benchmark; however, the 7-year and 10-year government bonds currently yield 4.12% and 4.35%, respectively.

The term structure of credit spreads for issuers of Aloysiuss credit quality indicates that 10-year credit spreads are 20 bps higher than 9-year spreads. What is the expected market discount rate for Time's 10-year issue?