JA Inc is considering a major recapitalisation. JA's enterprise value is currently $2 billion with a debt to capital ratio of 20%. Its current equity beta is 0.9 and its pre-tax cost of debt is 7%. JA is planning to double its debt to capital ratio to 40% and it estimates that its enterprise value will increase by 20% if it increases it debt ratio. The firm currently has a tax rate of 40%. The risk-free rate is 6% and the market risk premium is 4%. What will the pre-tax cost of debt have to be at 40% debt to capital ratio for enterprise value to increase by 20%. Assume a perpetual growth rate of 6%