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Question: assume that dorothy pix has a sole income from ozelectronics...

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Assume that Dorothy Pix has a sole income from OzElectronics Ltd in which she owns 15% of the ordinary share capital. Currently, she has no savings. In early December, 2018, Oz Electronics Ltd reported net profits after tax of S600,000 for the last accounting year, 2017-18 (1 October, 2017 to 30 September, 2018), and announced it expects net profits after tax for the current accounting year, 2018-19, to be 25% higher than last financial years figure. The company has a dividend payout ratio of 60%, which it plans to continue, and will pay the annual dividend for 2017-18 in late- January, 2019, and the dividend for 2018-19 in late-January, 2020 In late-January, 2019, Dorothy wishes to spend S84,000, which will include the cost of a new car. How much can she consume in late-January, 2020 if the capital market offers an interest rate of 8% per year?

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