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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 514 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 514 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 three possible states of the world: $5 million with a 0.2 probability, $1.7 million with a 0.5 probability, and 50.5 million 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 at the end of the calculations. Debt/Capital ratio is 0. ROE 9 90 G- CV Debt/Capital ratio is 10%, interest rate is 9%. ROE = % CV - Debt/Capital ratio is 50%, interest rate is 11%. ROE 96 96 O CV = Debt/Capital ratio is 60%, Interest rate is 14% ROE 90 = CV

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