256 16: Loan capital Part E Capital and the financing of companies
Answers to Quick Quiz
1 A, C and D are correct. Whilst the company has a contractual duty to pay interest on debentures, there is
no duty on it to pay dividends on shares. B is therefore incorrect.
2 B. A mortgage is an example of a fixed charge. It can extend to, for instance, plant and machinery as well
as land.
3 True. A register of charges must be kept, a register of debentureholders is not required to be kept by the
Act.
4 A, C and D are true. As the charge does not attach to the asset until crystallisation, B is untrue.
5 False. Certain charges such as charges securing a debenture issue and floating charges need to be
registered within 21 days.(^) Now try the questions below from the PracticeQuestion Bank
Number
35, 36