Question: 3 [5 Marks] A company has just been taken over by new management that believes it can raise earnings before taxes (EBT) from $600 to $1,000, merely by cutting overtime pay and reducing cost of goods sold. Prior to the change, the following data applied: Total assets $8,000 Debt ratio 45% Tax rate 35% BEP ratio 13.31% EBT $600 Sales $15,000 These data have been constant for several years, and all income is paid out as dividends. Sales, the tax rate, and the balance sheet will remain constant. What is the company's cost of debt? rol