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 Where application is made to the court for confirmation of a reduction in capital, the court may require that creditors should be invited by advertisement to state their objections. In which of the following ways can the need to advertise be avoided? 

 Select all that apply. 

A

 Paying off all creditors before application to the court 

B

 Producing a document signed by the directors stating the company's ability to pay its debts 

C

 Producing a guarantee from the company's bank that its existing debts will be paid in full 

D

 Renouncement by existing shareholders of their limited liability in relation to existing debts 

Which of the following statements correctly describes a Chief Executive Officer's (Managing Director's) actual authority?

A

The authority that the Chief Executive Officer says to others they have

B

The authority that the board expressly gives to them

C

The authority that is usual for a Chief Executive Officer

Which of the following is a director who has not been validly appointed but is held out by the company to be a director?

A

De facto director

B

De jure director

C

Alternate director

D

Shadow director

 Which of the following types of director is expressly appointed as such? 

A

 De jure 

B

 De facto

C

Shadow 

What is the minimum age that a director can be? 

A

16

B

17

C

18

 How many directors are required to retire at the first annual general meeting of a public company? 

A

 One-third of the directors 

B

 Half the directors 

C

 All of the directors 

Which of the following describes the actual authority of a Chief Executive Officer? 

A

The authority that the board expressly gives to them 

B

 The authority that is usual for a Chief Executive Officer 

C

 The authority that the Chief Executive Officer says to others they have 

 The powers of a company's directors are defined in which company document? 

A

 Articles of Association 

B

 Memorandum of Association 

C

Register of Directors 

 To which of the following does a director owe their statutory duties? 

A

 The members personally 

B

 The company as a whole 

C

 The board of directors 

This question appeared in the June 2015 exam. 

A division is considering investing in capital equipment costing $2.7m. The useful economic life of the equipment is expected to be 50 years, with no resale value at the end of the period. The forecast return on the initial investment is 15% per annum before depreciation. The division's cost of capital is 7%? 

What is the expected annual residual income of the initial investment? 

A

$0 

B

($270,000) 

C

$162,000 

D

$216,000