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

question 24

Multiple Choice

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

• A)A spin-off 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.
• E)A spin-off results in a higher price for the subsidiary.

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Definitions:

Iroquois Terminology

Iroquois terminology consists of words, phrases, and concepts specific to the Iroquois, a group of Indigenous peoples of North America known for their political confederacy and impactful cultural practices.

Mother's Brother

in anthropology, emphasizes the role of a mother's brother (maternal uncle) in kinship systems, which can vary in importance and function across different cultures.

Mother's Sister

Often referred to as an aunt, this term emphasizes the relationship from the perspective of one's mother's sibling.

Common-Interest Associations

Associations that result from the act of joining, based on sharing particular activities, objectives, values, or beliefs.