Which of the following is not true of a split-off?
A) A split-off is a variation of a spin-off
B) Parent company shareholders receive shares in a subsidiary in return for surrendering their parent company shares
C) Split-offs are best suited for disposing of a less than 100 percent investment stake in a subsidiary,
D) A split-off reduces the parent firm's earnings per share.
E) The split-off reduces the pressure on the spun-off firm's share price

Question

Quizplus · Accepted Answer

A split-off actually increases the parent firm's earnings per share, as it reduces the number of outstanding shares.

Which of the Following Is Not True of a Split-Off