Wyatt Oil has a bond issue outstanding with seven years to maturity, a yield to maturity of 7.0%, and a BBB rating. The bondholders' expected loss rate in the event of default is 70%. You are also given the following information for corporate bonds. Assuming the economy is in recession, then the expected return on Wyatt Oil's debt is closest to: Rating AAA AA A BBB BB B CCC Average Default Rate 0.0% 0.1% 0.2% 0.5% 2.2% 5.5% Recession Default Rate 0.0% 1.0% 3.0% 3.0% 8.0% Average Beta 0.05 0.05 0.05 0.10 0.17 0.26 12.2% 16.0% 48.0% 0.31 A.4.9% B. 5.5% C. 3.5% D. 7.0%