MM Propositions Locomotive Corporation is planning to repurchase part of its common stock by issuing corporate debt. As a result, the firms debtequity ratio is expected to rise from 35 percent to 50 percent. The firm currently has $3.1 million worth of debt outstanding. The cost of this debt is 6.7 percent per year. The firm expects to have an EBIT of $1.075 million per year in perpetuity and pays no taxes.

d. What is the expected return on the firms equity after the announcement of the stock repurchase plan?

I know the formula is rs = ro + (B/S) * (ro-rb)

How do we find the (B/S) in this problem? Thank you!