A firm stock price is $25 per share and is expected to grow at a 5% compound annual rate. What should the stock price per share be in 5 years?

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calculate the compounded figure after 5 years.

Principal equivalent is $25 and rate is 5% annually

The final value should be

A=P(1+ r/n) ^nt

P = principal amount (the initial amount you borrow or deposit)

r = annual rate of interest (as a decimal)

t = number of years the amount is deposited or borrowed for.

A = amount of money accumulated after n years, including interest.

n = number of times the interest is compounded per year

=25 x (1.05)^5

=25 x 1.27628156

= 31.9070391

The value will be $31.9070391

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