What is a spin-off? Answer is not possible or not listed Creating a new company
ID: 2806250 • Letter: W
Question
What is a spin-off?
Answer is not possible or not listed
Creating a new company from a sub-unit, giving the stock in the new company to existing shareholders (old company is maintained.)
Two or more companies merge. (Only one of the original legal entities remains. All others are destroyed.)
Creating a new company from a sub-unit, giving the stock in the new company to existing shareholders (old company is destroyed.)
Creating a new company from an IPO Sale of a sub-unit
A.Answer is not possible or not listed
B.Creating a new company from a sub-unit, giving the stock in the new company to existing shareholders (old company is maintained.)
C.Two or more companies merge. (Only one of the original legal entities remains. All others are destroyed.)
D.Creating a new company from a sub-unit, giving the stock in the new company to existing shareholders (old company is destroyed.)
E.Creating a new company from an IPO Sale of a sub-unit
Explanation / Answer
Q. What is a spin-off?
Answer : B. Creating a new company from a sub-unit, giving the stock in the new company to existing shareholders (old company is maintained.)
A spinoff is the creation of an independent company through the sale or distribution of new shares of an existing business or division of a parent company. A corporation creates a spinoff by distributing 100% of its ownership interest in that business unit as a stock dividend to existing shareholders.
When a corporation spins off a business unit that has its own management structure, it sets it up as an independent company under a renamed business entity.
The company that initiates the spinoff is referred to as the parent company.
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