1. Which of the following isnota characteristic of a share?

Select one:

a.

It confers rights which are enforceable in law.

b.

It is a debt due by the company to the holder

2. difference between equity and debt finance is:

Select one:

a.

Debt incurs a dividend whereas equity incurs interest

b.

A debt gives rise to a creditor of the companywhereasequity gives rise to a member of the company

c.

Debt is a liability on the balance sheet whereas equity belongs in the assets on the balance sheet

d.

Debt is an asset on the balance sheet whereas equity belongs in share capital on the balance sheet

c.

It can be sold by the owner.

d.

The legal and equitable interest in a share may be held by different persons.

3.Which of the following statements is incorrect? The rule inTurquand'scase:

a.

does not eliminate the need for outsiders to check the registered securities of the PPS Register

b.

has been adopted by s 129 of the Corporations Act.

c.

was aimed at overcoming the doctrine of constructive notice.

d.

has largely been overruled by statute

4.Which of the following statements isnotcorrect?

a.

Offer information statementswere introduced as a disclosure document for small scale fundraising.

b.

Offer information statementsare governed by s 714, of the Corporations Act.

c.

Offer information statements must state the risks involved in investing in the securities.

d.

Offer information statements are a longer version of a prospectu

5.Which of the following conditions isnotrequired before a company may reduce its capital?

Select one:

a.

The reduction must not materially prejudice the ability of the company to pay its creditors.

b.

The reduction must approved by shareholders.

c.

The reduction must be approved by ASIC.

d.

The reduction must be fair and reasonable to company's shareholders

6.In July 2021, the directors of ABC Ltd have decided not to pay a dividend for 2020.The companyhas no constitution.

The membersof ABC Ltd arrange a meeting of membersand pass a 80% resolutionorderingthedirectors to pay a dividend.

Select the correctanswer below based on thesefacts.

Select one:

a.

Directors must pay the dividend as the members have passed a special resolution

b.

Directors can ignore the resolution as directors have the power to determine dividends under the RR'S

c.

The directors do not have to pay the dividend because the member should have passed the resolution before the end of the financial year ending 2020

d.

The directors do not have to pay because members can only do this at theAGM

7.Denny, a member of ABC Ltd, asserts that Benny, a director and very influential member of the company, has engaged in conduct which has significantly benefited his family at the expense of the company. He would like court action to be taken against Benny to redress this very serious abuse of position. However, the other directors of the company rarely question Benny's decisions or dare challenge him. How would you advise Denny to proceed?

a.

To apply to court for leave to commence proceedings on behalf of the company against Benny

b.

To commence a common law derivative suit against Benny

c.

To request the directors of Downs Pastoral Company Ltd to institute proceedings against Benny

d.

To commence proceedings on behalf of the company against Benny

8.Which of the following statements best expresses the basic function of a prospectus?

a.

It must contain all the information that an investor would reasonably need to make an informed assessment about whether or not they wanted to invest.

b.

It needs to contain all information about the company no matter how minor the detail

c.

No forecasting is allowed

d.

It must contain all the information that an investor would reasonably need to make an informed assessment about how to maximise profits from their investment activities