Question: how is the calculation here Otasha Inc has zero coupon debt with a face value of 120 million due in 10 years time,and no other

how is the calculation here

Otasha Inc has zero coupon debt with a face value of 120 million due in 10 years time,and no other debt outstanding. The current risk-free rate is 2.5%, but due to default risk the yield to maturity of Otasha's debt is 8%. Holders of Otasha's debt believe that in the event of default, 25% of the losses are attributable to distress costs. The debtholders' estimate of the present value of these distress costs is closest to:

A)23.4 million

B)9.5 million

C)6.4 million

D)13.9 million

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