QUESTION 1

1. Give an example of a right that a member/ shareholder doesnothave in relation to their shares.

a.Instructing the board to change course on a policy or strategy it has adopted without first passinga resolution at a general meeting.

b.Voting on changes to the company's constitution (i.e the internal rules that govern it)

c.Voting on proposals to 'vary' the rights attached to their shares.

d.Appoint and removal of directors of the company they hold shares in.

QUESTION 2

Whocannotcall a meeting of debenture holders?

a.The court.

b.The trustee has the power to call a meeting under a variety of circumstances such as in relation to a breach of the trust deed by the borrower.

c.The debenture holders if they hold (either by themselves or jointly) 10% or more of the total debt.

d.A concerned Member of the public with standing under s796A of theCorporations Act.

QUESTION 3

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

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

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

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

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

QUESTION 4

Which Answer correctly identifies the rights and obligations of a redeemable preference share?

a.They are a pre-determined function or right which allows the company to repurchase (and cancel) the shares for an amount of money determined at the time the shares were issued.

b.It is similar to a share buyback in the sense that it provides a right to the company to force its shareholders to negotiate on what terms they will sell the shares back to the company.

c.One of the benefits of redeemable shares is they are redeemed by the company thus giving the votes attached to those shares to board members. This allows boards to better maintain control of the company and therefore execute their chosen strategy for the company.

d.A redeemable preference share operates like a convertible bond where, at maturity, the holders can redeem its loan for a pre-agreed number of shares.

QUESTION 5

What is a Defining Feature of a Hybrid?

a.It possesses characteristics of both debt and equity.

b.It is a complex financial product that, unlike ordinary shares, is regarded as a security under theCorporations Act 2001(Cth).

c.Preference shares.

d.Convertible Notes and Bonds.