Koy Corporation's 5-year bonds yield 8.25%, and 5-year T-bonds yield 5.30%. The real risk-free rate is r* = 3.30%, the inflation premium for 5-year bonds is IP = 1.60%, 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. 2.20%

b. 3.70%

c. 1.80%

d. 2.95%

e. 2.55%