A Spin-Off Is a Transaction in Which a Parent Creates

question 123

True/False

A spin-off is a transaction in which a parent creates a new legal subsidiary and distributes shares it owns in the subsidiary to its current shareholders as a stock dividend.

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Definitions:

Roth IRA

A type of individual retirement account where contributions are made with after-tax dollars, but withdrawals during retirement are tax-free.

Traditional IRA

A Traditional Individual Retirement Account (IRA) is a type of retirement savings account that allows an individual to make pre-tax contributions, with the investments growing tax-deferred until withdrawals begin at retirement age.

Liquidated Investments

Investments that have been converted into cash or a cash-equivalent, typically to meet short-term financial obligations or shifts in investment strategy.

Social Security Retirement Benefits

Government-provided payouts that individuals receive upon retirement, based on their earnings history and contributions to the Social Security system during their working years.