A divestiture that results in an operating unit becoming an independent company is a ________.
A) sale of a line of business
B) strategic merger
C) spin-off of an operating unit
D) leveraged buyout

Question

Quizplus · Accepted Answer

A spin-off of an operating unit is when a company separates and creates a new, independent company. The other options (A, B, D) do not necessarily result in the creation of an independent company. A sale of a line of business may be acquired by another company, a strategic merger combines two companies together, and a leveraged buyout involves a company being purchased by a small group of investors.

A Divestiture That Results in an Operating Unit Becoming an Independent