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

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Click here to read the look 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 $19 million, it currently uses only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 40%. The CFO has estimated next year's EBIT for the possible states of the world: $5,4 million with a 0.2 probability, $2.3 million with a 0.5 probability, and $0.7 million with a 0.3 probability calculate Near's expected RO, Mandard Oviation and coefficient of variation for each of the following debt-to-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places at the end of the calculations Debit/Capital ratio is 0. ROE d- CV- Debt Capital ratio is 10%, interest rate is 9% ed ROE- CV Debt/Capital ratio is 50%, interest rate is 11% ROE - CV - Debt Capital ratio is 60%, interest rate is 14% ROE CV

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