al Leverage 12-12 Highridge Brewing Co. (HBC) wants to estimate next year's retum on equity (ROE) under different financial leverage ratios. HBC's total capital is $14 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its tax rate is 30%. The CFO has estimated next year's EBIT for three possible states of the world: 54.2 million with a 0.2 probability, S2.8 million with a 0.5 probability, and $700,000 with a 0:3 probability. Calculate HBC's expected ROE, standard deviation, and coefficient of variation for each of the following debt-to-capital ratios; then evaluate the results: DebuCapital Ratio Interest Rate 0% 10 998 50 11 60