An Equity Carve-Out Differs from a Spin-Off for All but Which

question 16

Multiple Choice

An equity carve-out differs from a spin-off for all but which one of the following reasons?

• A) Generates a cash infusion into the parent
• B) Is undertaken when the unit has very little synergy with the parent
• C) The proceeds often are taxable to the parent
• D) Continues to be influenced by the parent's management and board
• E) The carve-out's shareholders may differ from those of the parent's shareholders

---

Definitions:

Laboratory Experiments

Controlled experiments typically conducted in a lab setting to study behavior or test hypotheses in economics and other sciences.

Markets For Factors

Markets where factors of production such as labor, capital, and land are bought and sold.

Goods And Services

Physical products and intangible activities that fulfill the wants or needs of consumers and can be offered in a market for acquisition.

Markets For Factors

Markets where factors of production like land, labor, and capital are bought and sold.