1.

Which of the following statement is incorrect concerning creditors?

Group of answer choices

The creditors always control the company

The creditors are paid a return of capital before the shareholders when a company is wound up

The creditors are entitled to a payment of interest regardless of whether the company has made a profit or a loss

The creditors have an equitable interest in the company

2.

Which of the following statement is correct concerning shareholders?

Debentures are another form of share capital

There is no real difference between equity and debt capital as the companys capital belongs to the company

The shareholder that has acquired 10% of a companys share capital is entitled to 10% of the companys profits as dividends

In a winding up, capital is returned to shareholders after the creditors have been paid

3.

Which of the following is a characteristic of a share?

It is personal property of the shareholder made up of a bundle of rights

It cannot be sold by the owner

It confers rights which are not enforceable by law

It is a debt due by the company to the holder

4.

An issue of debentures enables a company to:

Avoid paying tax on its income

Restrict the class of persons who may invest in the company

Borrow money from the general public

Lend money to the public