q

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. a. What will be Start-Up's ratio of market value to book value? Note: Do not round intermediate calculations. Answer is complete and correct. b. What will be Start-Up's ratio of market value to book value if the firm can earn only a rate of return of 10% on its investments? Note: Do not round intermediate calculations. Round your answer to 1 decimal place. Answer is complete but not entirely correct