Question: Macy's bonds are currently rated BBB. They have a yield of 8.5%, treasury bonds with a similar maturity have a yield of approximately 1%. If

Macy's bonds are currently rated BBB. They have a yield of 8.5%, treasury bonds with a similar maturity have a yield of approximately 1%. If you reinvest your coupons into the bonds, and if Macy's does not default what is the expected return to maturity on Macy's bonds?

-Approximate 1%

- More than 1% but less than 8.5%

-Approximate 8.5%

-More than 8.5%

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