1. Toiletry Products, Inc. manufactures diapers. As their target customers age and pass on, sales of the product are expected to increase. Past statistics suggest that earnings and dividends will increase at a rate of 4% annually forever. The firm just paid a dividend of $2.50. Given a required return of 12%, the stock should sell for a. $10.25 b. $12.50 c. $15.00 d. $16.25 e. $32.50

1. Toiletry Products, Inc. manufactures diapers. As their target customers age and pass on, sales of the product are expected to increase. Past statistics suggest that earnings and dividends will increase at a rate of 4% annually forever. The firm just paid a dividend of $2.50. Given a required return of 12%, the stock should sell for a. $10.25 b. $12.50 c. $15.00 d. $16.25 e. $32.50