The Following Are Advantages of Spin-Offs

question 22

Multiple Choice

The following are advantages of spin-offs:

• A)They widen investor choice by allowing them to invest in just one part of the business, and they can improve incentives for managers.
• B)They widen investor choice by allowing them to invest in just one part of the business; they can improve incentives for managers; and by spinning off businesses with "poor fit," parent firms can concentrate on their core businesses.
• C)They widen investor choice by allowing them to invest in just one part of the business; they can improve incentives for managers; by spinning off businesses with "poor fit," parent firms can concentrate on their core businesses; and they relieve investors of the worry that funds will be siphoned off from one business to support unprofitable capital investments in another.
• D)By spinning off businesses with "poor fit," parent firms can concentrate on their core businesses, and they relieve investors of the worry that funds will be siphoned off from one business to support unprofitable capital investments in another.

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