Which of the Following Is the Best Name for a Distribution

question 3

Multiple Choice

Which of the following is the best name for a distribution of all shares in a subsidiary to existing shareholders of the parent company?

• A)Carve-out.
• B)Spin-off.
• C)Split-off.
• D)Tracking stock.

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Definitions:

Market Dictated Price

The price of a good or service as determined by the supply and demand dynamics in the open market.

Markup Percentage

A percentage added to the cost price of goods to cover overhead and profit.

Total Cost Concept

An accounting principle that sums all costs associated with the production of a good or service, including direct, indirect, fixed, and variable costs.

Variable Costs

Costs that vary in direct proportion to changes in the level of production or sales activity.