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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 17

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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 17 million yes only common equity, it has no future plans to use preferred stock in its capital structure, and its federal-plus-state tax rate is 10%. The CFOs estimated next year's EIT for three states of the world: $4.7 million with a 0.2 probability, $3.1 million with a 0.5 probability, and $0.8 million with a 0.3 probability to expected standard and coefficient of variation for each of the following debt-to-capital ratios. Do not found intermediate calculations. Round your awwerste twe decinat place at the end of the calculations, Debt/Capital ratio is 0. ROE % O Ye CV Debt/Capital ratio is 10%, interest rate is 9% ROE CV Debt/Capital ratio is 50%, interest rate is 11% ROE O- % CV- Debt/Capital ratio is 60%, interest rate is 14%. ROE % % O- CV- ade it Now Save & Continue wine DOKT sess 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 $17.mition, currently uses only communion 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 EeIT for three comune states of the world: 51.7 million with a 0,2 probability, $3.1 million with a 0.5 probability, and $0.8 million with a 0.3 probability calculate Near's expected of standard deviation, 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 Debt/Capital ratio is o ROE O CV = Debt Capital ratio is 10%, interest rate is 9% d ROE- O- CV- Debt/Capital ratio is 50%, interest rate is 11% ROE - 96 O- 96 CV- Debt/Capital ratio is 60%, interest rate is 14% RDE - O- CV

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