Wyatt Oil has a bond issue outstanding with seven years to maturity, a yield to maturity of $7\mathrm{.}0\%,$ and a

BBB rating. The corresponding risk$-$free rate is $3\%$ and the market risk premium is $5\%.$

Assuming a normal economy, the expected return on Wyatt Oil's debt is closest to:

A$)5\mathrm{.}5\%.$

B$)4\mathrm{.}9\%.$

C$)3\mathrm{.}5\%.$

D$)3\mathrm{.}0\%$

$9$

n $=7$ y

$-$

TM $=7$

$\%$

rf $--$

m $-$

rf $=5/$

$-$