You are the CFO of a new company that is planning to issue new bonds soon. You receive the following information from your staff and now must calculate the interest rate at which to issue the bonds. Given this information, what nominal interest rate do you recommend?

Expected Inflation Rate: $2\%$

Interest rate of similar corporations$($AAA rated$)30-$year bonds: $7\%$

Interest rate of $30-$Year Treasury Bonds: $5\mathrm{.}49\%$

Interest rate of $3-$month treasury bills: $4\mathrm{.}91\%$

Liquidity$-$risk premium: $0\mathrm{.}03$