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C here to read the book Business and Financial Risk FINANCIAL LEVERAGE EFFECTS The Neal Company wants to estimate next year's return on equity (ROE)

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C here to read the book Business and Financial Risk FINANCIAL LEVERAGE EFFECTS The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $16 milion, I currently uses only common equit, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 10%. The Co has estimated next year's EBIT for three possible states of the world 4.1 milion 202 probability, 13 million with a 0.5 probability, and $0.4 million with a 0.3 probability Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following deteta ratios. Do not round Intermediate calculations. Round your answers to two decimal places at the end of the calculations Debt Capital ratio is 0. RE CV - Debt Capital ratio is 10% Interest rates ROE - CV- Debt Capital ratio is 50%, interest rate is 11% ROT- Debt Capital ratio is 60, ter ROE CV- Continue without MacBook Pro 308AA 80

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