Problem Equity Valuation A friend tells you that you should buy Leclerc Company stock as it is a great deal. It is January 1, 2006 and the stock is trading at peshane You obtam the financial statements for Leclere and determine the following: 1 Book value is 12 pershare as of December 31, 2005 2. Earnings for 2005 were SA d per shark 3. Earnings are expected to grow at 20 for the next four years 4. Dividend payout is 10% 5. Residual income is expected to be maro from 2007 onwards 6. Cost of equity capital is 15% Determine, using the residual income method, whether you should buy Leclere stock as of January 1, 2006