The Blackburn Group has recently issued 20-year,unsecured bonds rated BB by Moody's.These bonds yield 443 basis points above the U.S.Treasury yield of 2.76%.The yield to maturity on these bonds is

Question

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To find the yield to maturity on the bonds, we need to add the yield spread of 4.43% (443 basis points) to the U.S. Treasury yield of 2.76%. This gives us a yield to maturity of 7.19%, which is option B.

The Blackburn Group Has Recently Issued 20-Year,unsecured Bonds Rated BB