ULU Lege Attempts: Keep the Highest: /12 5. Problem 13.07 Click here to read the book Business and Financial Risk FINANCIAL LEVERAGE EFFECTS The Neal Company wants to estimate next year's return on equity (ROE) under different financial leverage ratios. Neal's total capital is $12 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: $5.1 million with a 0.2 probability, $1.8 million with a 0.5 probability, and $0.8 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 O CV - Debt/Capital ratio is 10% Interest rate is 9% ROE O. CV- Debt/Capital ratio is 50% Interest rate is 11%. ROE - CV Debt Capital ratio is 60%, loterest rate is 14% ROL