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A company has $120 million of earnings before interest and taxes and $40 million of interest expense.If the company issues $ 100 million of 7%

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A company has $120 million of earnings before interest and taxes and $40 million of interest expense.If the company issues $ 100 million of 7% debt and uses the proceeds to be invested temporarily in commercial paper that yields 4%, what is the new (or pro forma) interest coverage ratio? (Express your answer as a ratio (rather than as a percentage) accurate to four decimal places.)

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