Use the following information to answer the questions 4-5 below. Consider the following information regarding corporate bonds AAA AA A BBB BB B CCC 12.2% 0.0% 0.1% 0.2% 0.5% 2.2% 5.5% Rating Average Default Rate Recession Default Rate Average Beta 0.0% 1.0% 3.0% 16.0% 480% 30% 80% 0.10 0.17 0.05 0.05 0.05 0.26 0.31 Q. Rearden Metal has a bond issue outstanding with ten years to maturity, a yield to maturity of 8.6%, and a B rating. The corresponding risk-free rate is 3% and the market risk premium is 6%. Assuming a normal economy, the expected return on Rearden Metal's debt is closest to OA) 0.6% OB) 1.6% O C) 4.6% OD) 6.0% QUESTION 5 Rearden Metal has a bond issue outstanding with ten years to maturity, a yield to maturity of 8 6%, and a B rating. The bondholders' expected loss rate in the event of default is 50% Assuming a normal economy, the expected return on Rearden Metal's debt is closest to: OA) 0.6% B) 1.6% O C) 4.6% OD) 5.9%