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Default Risk Premium of Bonds

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Koy Corporation's 5-year bonds yield 6.75%, 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?

0.83%
0.85%
0.71%
1.03%
0.66%

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The yield on Koy bonds is given as

Yield = Real risk free ...

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