A New Firm Is Created from the Assets Divested When

question 4

Multiple Choice

A new firm is created from the assets divested when a spinoff occurs. Shareholders of the divesting firm become ______.

• A) owners lose their ownership status
• B) shareholders of old firm only
• C) shareholders of the new firm
• D) bond holders

---

Definitions:

Flexibility

Flexibility in a business context refers to the ability to adapt quickly to changes in the market or operational conditions, maintaining efficiency and meeting customer demands.

Supply Chain

The network of individuals, organizations, resources, activities, and technology involved in the creation and sale of a product, from supplier to customer.

Capacity

Capacity refers to the maximum level of output that a company can sustain to produce a product or service, considering available resources.

Inventory

The goods and materials that a business holds for the ultimate goal of resale, production, or utilization.