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Click here to read the took: 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 took: 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 $18 milion, 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 CrO has estimated next year's EBIT for three possible states of the world: $5.1 million with a 0.2 probability, 13.2 million with a 0.5 probability, and $0.7 million with * 0.3 probability Calculate Near's expected ROE, standard deviation, and coeficient of vartotion for each of the following debt-to-capital ratlos. Do not found intermediate calculations. Round your answers to two decimal places at the end of the calculations Debt/Capital ratio is 0. ROE CV Debt/Capital ratios 10% interest rates ROE 0 CV- Debt/Capital ratio is 50, Interest rate is 115 ROE CV- Debt/Capital ratio is 50%, interest rate 145 ROE CV

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