A spin-off is an action in which:
A)the management bids for and acquires the firm.
B)one firm issues stock to acquire another firm.
C)successful product lines are sold to competitors.
D)a portion of the firm's assets are sold off to form a new company.

Question

Quizplus · Accepted Answer

A spin-off is a process in which a parent company sells off a portion of its assets to form a new, independent company. This is usually done to streamline the parent company's operations or to focus on its core business, while allowing the spin-off company to develop its own identity and pursue its own growth opportunities. Option A refers to a management buyout, B refers to a stock-for-stock merger or acquisition, and C refers to the sale of successful product lines, which are not necessarily related to a spin-off.

A Spin-Off Is an Action in Which