(C) (55%) You obtain the following information for Gulf Company 1. Book value is S12 per share as of December 31, 2015. 2. Earnings for 2015 were $4.0 per share. 3. Earnings are expected to grow at 20% for the next four years. 4. Dividend payout is 40%. 5. Residual income is expected to be zero from 2017 onwards. 6. Cost of equity capital is 15%. On January 1, 2016, Gulf Company's stock is traded at KD25 per share, using the residual income method, show whether you should buy Gulf stock as of January 1, 2016. No. of years PVF 15% 0.7561 0.6575 0.5718 2 3 4 1 0.8696