Which of the following is the best definition of a spin-off?
A) The splitting up of a company into two or more companies.
B) The distribution of shares in a subsidiary to existing parent company shareholders.
C) Provisions allowing existing shareholders to purchase stock at some fixed price should an outside takeover bid take place, discouraging hostile takeover attempts.
D) Attempts to gain control of a firm by soliciting a sufficient number of shareholder votes to replace existing management.
E) A financial device designed to make unfriendly takeover attempts unappealing, if not impossible.

Question

Quizplus · Accepted Answer

A spin-off occurs when a company creates a new independent company by distributing shares of the new company to its existing shareholders, effectively creating a separate entity that operates independently of the parent company.

Which of the Following Is the Best Definition of a Spin-Off