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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 rate of return on

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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 rate of return on equity of 20%, 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? (Do not round Intermediate calculations.) Market-to-book ratio 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? (Do not round intermediate calculations. Round your answer to 1 decimal place.) Market-to-book ratio

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