A companys 10-year bonds are yielding 8.5% per year. Treasury bonds with the same maturity are yielding 6.9% per year, and the real risk-free rate (r*) is 2.7%. The inflation premium is 3%, the liquidity premium is 0.5%, and the maturity risk premium is 1.2%. What is the default risk premium on the corporate bonds? * a) 1.1% b) 2.1% c) 2.3% d) 3.5% e) None of the above