Koy Corporation's 5-Year Bonds Yield 8

Koy Corporation's 5-year bonds yield 8.00%,and 5-year T-bonds yield 5.15%.The real risk-free rate is r* = 3.0%,the inflation premium for 5-year bonds is IP = 1.75%,the liquidity premium for Koy's bonds is LP = 0.75% versus zero for T-bonds,and the maturity risk premium for all bonds is found with the formula MRP = (t - 1) 0.1%,where t = number of years to maturity.What is the default risk premium (DRP) on Koy's bonds?

A) 2.16%
B) 2.10%
C) 2.12%
D) 2.48%
E) 2.18%