the project was expected to be discontinued in six years. The proposed project was capable of providing 30000 kW [1] per hour power.

PSUWC ran its plants 24 hours a day, 7 days a week at an average of 60 % Capacity factor [2]

increase their capacity factor by 16 % a year till they reached a 100% capacity factor. (This meant that the capacity factor for year 2, CF2, would be = CF1*(1+growth_rate),

A total investment of $ 31,000,000.00 USD for new equipment was required.

The equipment had fixed maintenance contracts of $ 4,100,000.00 per year with a salvage value of $ 7,000,000.00 and variable costs were 55 % of revenues.

The corporate tax rate was 32 %

1,000,000 shares of stock outstanding at a current price of $ 14.00.

The company also has 30,000 bonds outstanding, with a current price of $ 937.00. The bonds pay interest semi-annually at a coupon rate of 5.70 %. The bonds have a par value of $1,000 and will mature in 23 years.

Companhia Paranaense de Energia - COPEL (NYSE Ticker Symbol ELP) [3] . In addition, management believes the S&P 500 is a reasonable proxy for the market portfolio.

Therefore, the cost of equity is calculated using the beta from ELP and the market risk premium based on the S&P 500 annual expected rate of return [4].

Tom knew that because of the size of the proposed project, he had to take into account the change in capital structure the new project would cause his firm. To this end, he had a choice between raising the new capital needed either using 27 % /73 % split between issuing bonds/equity or a 73 % /27 % split between issuing bonds/equity . The bonds would have to be retired at the end of the project's life [6]. Tom knew that the cost of debt would depend on the new D/E ratio that the firm would have based on his decision to raise capital. Tom looked at the worksheet titled Rd with DtoE, realizing that the cost of debt increased with an increasing D/E ratio [7] . Additionally, the state government had promised to raise the debt for PSUWC via the issuance of bonds, with the caveat that upon termination of the project PSUWC would have to pay a Nuclear Waste Disposal Fee, equivalent to the amount of money raised via the issuance of debt.

How would I calculate

Calculate the original debt and original equity using the data provided in the case.

Calculate the new debt and equity using the data provided. (Note: Values asked are only the portion of D and E generated due to the new investment.)

Calculate the old and new D/E ratios the data provided. (Note: The new D/E ratio should account for existing capital structure and new investment.)