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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 premiu Koy's bonds is LP- 0.75%

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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 premiu 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? l. m for 5-year bonds is 1: 1.75%, the liquidity premium for

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