ABC Created a New Company,XYZ,from Its Subsidiary Unit and Maintained

question 9

Multiple Choice

ABC created a new company,XYZ,from its subsidiary unit and maintained ownership of all of the shares in XYZ.When ABC felt market conditions were favorable,it did an IPO and sold 25 percent of its shares in XYZ.ABC has effectively completed

• A)a reversal.
• B)a divestiture.
• C)an equity carve-out.
• D)a spin-off.
• E)a split-up.

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Definitions:

Competitors

Companies or entities that offer similar products or services in the same market, vying for the same customer base.

Generic Demand

The overall demand for a category of products or services rather than for a specific brand.

Cotton Incorporated

An organization that aims to increase the demand for and profitability of cotton through research and promotion.

Cotton Growers

Farmers or agricultural entities that specialize in the cultivation of cotton plants for the fiber used in textile production.