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please make it clear where the answers are, thanks so much :) FINANCIAL LEVERAGE EFFECTS The Neal Company wants to estimate next year's retum on

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please make it clear where the answers are, thanks so much :)

FINANCIAL LEVERAGE EFFECTS The Neal Company wants to estimate next year's retum on equity (ROE) under different financial leverage ratios. Neal's total capital is $12 millon, 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 10% The CFO has estimated next year's EBIT for three possible states of the world: $1.6 million with a 0.2 probabaty, $2.9 million with a 0.5 probability, and $0.3 milion with a 0.3 probabaty. Calculate Neal's expected ROE, standard deviation, and coefficient of variation for each of the following debt- ta-capital ratios. Do not round intermediate calculations. Round your answers to two decimal places at the end of the calculations. Debt/Capital ratio is 0. ROE- % % CV Debt/Capital ratio is 10%, interest rate is 9%. ROE = % % CV - Debt/Capital ratio is 50%, interest rate is 11% ROE = % % CV Debt/Capital ratio is 60%, interest rate is 14% ROE = 96 0 % CV

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