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The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $16 million, it currently

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The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $16 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 25%. The CrO has estimated next year's EBIT for three possible states of the world: 54.7 million with a 0.2 probability, 51.5 million with a 0,5 probability, and $300,000 with a 0.3 probability Calculate Neal's expected ROE, 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 Debt/Capital ratio is 0. RE: 0: CV: Debt/Capital ratio is 10%, interest rate is 9% ROE: o CV: Debt/Capital ratio is 50% interest rate is 11% RE: CV: Debt Capital ratio is 60%, interest rate is 14% ROE CV

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