You are considering investing in Blackmores, a pharmaceutical company's long-term debt. You require a credit risk premiu

[answerhappygod]

You are considering investing in Blackmores, a pharmaceutical
company's long-term debt. You require a credit risk premium of
3.5%, and a maturity risk premium of 1.5%. The long-term inflation
rate is 2%, the risk-free rate of return is 3% and Blackmores'
shareholders require a 2% premium above what creditors earn. Given
such information, what would be an appropriate total rate of return
suitable for Blackmores' long-term debt?
a. 8%
b. 10%
c. 12%
d. 11%