28. Stock Valuation. Start-Up Industries is a new firm that has raised $200 million by selling shares of stock. Management plans to earn a 24% rate of return on equity, which is more than the 15% rate of return available on comparable-risk investments. Half of all earnings will be reinvested in the firm. (LO2)

a. What will be Start-Up's ratio of market value to book value?

b. How would that ratio change if the firm can earn only a 10% rate of return on its investments?