Start-Up Industries is a new firm that has raised $390 million by selling shares of stock. Management plans to earn a 20% rate of return on equity, which is more than the 12% rate of return available on comparable-risk investments. Half of all earnings will be reinvested in the firm.

a. I've done it correctly.

b. What will be Start-Ups ratio of market value to book value if the firm can earn only a rate of return of 9% on its investments? (Do not round intermediate calculations. Round your answer to 1 decimal place.) NOTE: THE ANSWER IS NOT 1.0

Start-Up Industries is a new firm that has raised $390 million by selling shares of stock. Management plans to earn a 20% rate of return on equity, which is more than the 12% 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 s an 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 9% on its Investments? (Do not round Intermediate calculations. Round your answer to 1 decimal place.) Market-to-book ratio S 1.0