Business, 13.12.2019 20:31 tahiyazaman1493

The neal company wants to estimate next year's return on equity (roe) under different financial leverage ratios. neal's total capital is $15 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: $6 million with a 0.2 probability, $3.5 million with a 0.5 probability, and $0.3 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.

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The neal company wants to estimate next year's return on equity (roe) under different financial leve...