The Following Are Advantages of Spin-Offs

question 41

Multiple Choice

The following are advantages of spin-offs:
I.They widen investor choice by allowing them to invest in just one part of the business.
II.They can improve incentives for managers.
III.By spinning off businesses with "poor fit," parent firms can concentrate on their core businesses.
IV.They relieve investors of the worry that funds will be siphoned off from one business to support unprofitable capital investments in another.

• A)I and II only
• B)I, II, and III only
• C)I, II, III, and IV
• D)III and IV only

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Definitions:

Innate Competency

Innate competency refers to natural abilities or talents that an individual possesses without the need for formal training or education.

Strong Sense

A highly developed awareness or conviction in a particular area or aspect.

Subject Matter Expertise

Profound knowledge or skill in a specific area or topic, making one an authority in that field.

Complacency

A feeling of smug or uncritical satisfaction with oneself or one's achievements, leading to a potential lack of vigilance or readiness for change.