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Business, 03.01.2020 03:31 vanessa7676

Start-up industries is a new firm that has raised $210 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? (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 10% on its investments? (do not round intermediate calculations. round your answer to 2 decimal places.)

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