Speculate as to Why Northrop Grumman Used a Spin-Off Rather

question 23

Essay

Speculate as to why Northrop Grumman used a spin-off rather than a divestiture, split-off or split up to separate Huntington Ingalls from the rest of its operations? What were the advantages of the spin-off over the other restructuring strategies.

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Definitions:

Consumer Surplus

The benefit obtained by consumers because they are able to purchase a product for a price that is less than the maximum price that they are willing to pay.

Equilibrium Price

The rate at which the amount of products offered matches the amount of products consumers want.

Unregulated Market

A market where the government does not impose price controls, quotas, or other restrictions on the forces of supply and demand.

Deadweight Loss

The diminished economic effectiveness arising from a failure to achieve or the inability to achieve equilibrium for a product or service.