Which of the Following Is an Advantage of a Spin-Off

question 21

Multiple Choice

Which of the following is an advantage of a spin-off versus selling a subsidiary and distributing the cash?

• A)Increases the transaction costs associated with selling the subsidiary.
• B)Shareholders must immediately pay capital gains taxes versus ordinary income taxes on the value of the spin-off.
• C)A spin-off guarantees a lower cost of capital.
• D)The spin-off is not taxed as a cash distribution.

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Definitions:

Socially Withdrawn

Refers to individuals who avoid social interactions and tend to spend excessive time alone, often due to fear or anxiety.

Overthink

The process of thinking about something too much or for too long, often leading to unnecessary worry or anxiety.

Stressful Circumstances

Situations or events that cause a high level of tension, anxiety, or pressure.

Social-cognitive Perspective

A psychological approach that emphasizes the influence of social situations and cognitive processes on behavior and mental states.