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Assume that a firm distributes all of its earnings as dividends. Which of the following is
indicated by a price-earnings (P/E) ratio of 10?
Group of answer choices
The value of the stock will be 10 times the initial investment at the time of maturity.
The stock's value will increase by 10 percent every year.
The firm will pay a dividend of $10 per share.
It would take 10 years for an investor to recover his or her initial investment.
An investor would receive 10 percent of the total earnings of the firm at the time of liquidation.

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