Appliances, Inc. has no debt outstanding, and its financial position is given by the following data:

Assets (market value = book value)		$5,000,000
EBIT		$800,000
Cost of equity		12%
Stock price		$10
Shares outstanding		500,000
Tax rate		25%

The firm is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 20% debt based on market values, its cost of equity will increase to 13% to reflect the increased risk. Bonds can be sold at a cost of 6%. Appliance, Inc. is a no-growth firm. Hence, all its earnings are paid out as dividends. Earnings are expected to be constant over time.

As a creditor, you are concerned about the companys ability to repay its debt and interest. What is the new times interest earned?