7. Problem 13.07 Problem 13-7 Financial leverage effects The Neal Company wants to estimate next year's return on equity (ROE) under different leverage ratios. Neal's total capital is $13 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 or three possible states of the world: $6 million with a 0.2 probability, $2.5 mmion with a 0.5 probability, and700 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 at the end of the calculations Debt/Capital ratio is o. Debt/Capital ratio is 10%, interest rate is 9%. ROE = CV- Debt/Capital ratio is S096, interest rate is 11%. ROE- CV Debt/Capital ratio is 60%, interest rate is 14%. CV