A firm is worth $75 or $210 with equal probability and is financed with debt that has a face value of $80. It is considering a new project that is equally likely to be worth -$50 or +$55. The cost of capital is 12% for all securities. Calculate the present values of the firms debt and equity if the project is undertaken.

which one is the correct answer?

Debt 70.31; Equity 59.15

Debt 59.15; Equity 70.31

Debt 80; Equity 80

Debt 80; Equity 80