Which of the Following Is the Best Definition of an Equity

question 175

Multiple Choice

Which of the following is the best definition of an equity carve-out?

• A) The sale of stock in a wholly owned subsidiary via an IPO.
• B) A targeted share repurchase method.
• C) The sale of assets, operations, divisions, and/or segments of a business to a third party.
• D) Investment in more than one asset; returns do not move proportionally in the same direction at the same time, thus reducing risk.
• E) Rules and practices relating to how corporations are governed by management, directors, and shareholders.

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Definitions:

Opportunity Costs

Opportunity costs represent the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Carrying Cost

The total cost of holding inventory, including storage, insurance, taxes, and opportunity costs, over a certain period.

Credit

An arrangement wherein a borrower receives something of value now and agrees to repay the lender at a later date, usually with interest.

Graphically

Refers to representing data or models visually using graphs or charts.