** please show working steps and formulas . thank you

Rainbow Firm will generate a terminal cash flow of $370M or $110M in one year, with equal likelihood. Rainbow's outstanding debt has a correct market value today of $120M and is due in a year. the unlevered cost of equity = 20% , the cost of debt =15% , The capital market is perfect (no taxes, distress costs)

What is the cost of equity for Rainbow Firm?

a. 27.5%

b. 28.5%

c. 29.5%

d. 30.5%