2. A manufacturing company, We Build Stuff Ltd, is looking to borrow money from the public to expand its productive capacity through the purchase of more machinery. It is creating a debt-based security and is now producing a prospectus for this public issue that describes the security as a debenture. What terms would it need to offer in order to comply with the Corporations Act 2001 (Cth)?

a.

Under the terms of the loan, We Build Stuff Ltd must offer a security over its factory.

b.

There are no restrictions on what security may be granted, it can be an unsecured loan, but it would be wise to offer a higher rate of interest to encourage investors.

c.

The loan must grant a security over one of the company's factory or the whole or any part of its property.

d.

The loan must grant a security over the whole or any part of We Build Stuff Ltd's property.

2)Under s254T of the Corporations Act 2001 (Cth), a company is only permitted to pay a dividend under the following circumstances:

a.

All of the answers are correct. E.g all requirements in the other answers must be fulfilled to pay a dividend.

b.

The company's assets exceed its liabilities immediately prior to the dividend being paid.

c.

The dividend is fair and reasonable to the shareholders as a whole.

d.

The payment of a dividend does not prejudice the company's ability to pay back its creditors.