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Start-Up Industries is a new firm that has raised $360 million by selling shares of stock.Management plans to earn a 20% rate of return on

image text in transcribed Start-Up Industries is a new firm that has raised $360 million by selling shares of stock.Management plans to earn a 20% 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. 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 5% on its investments? Note: Do not round intermediate calculations. Round your answer to 1 decimal place

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