Chapter 14 - EOC Questions (CNOW) Check My Work (2 remaining) 7. . eBook 9. 10. 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%. Neal is a small firm with average sales of $25 million or less during the past 3 years, so it is exempt from the interest deduction limitation. The CFO has estimated next year's EBIT for three possible states of the world: $5.8 million with a 0.2 probability, $1.8 million with a 0.5 probability, and $500,000 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. Debat/Capital ratio is O. RE: 10.36 9 CV: Debt/Capital ratio is 10%, interest rate is 9%. ROE 06 CV: Debt/Capital ratio is 50%, interest rate is 11%. RE: 45 9 CV: Debt/Capital ratio is 60%, interest rate is 14%. ROE: 95 CV: Check My Work remaining)