A firm can distribute shares of a subsidiary in a transaction referred to as a(n) ________.
A) merger
B) spin-off
C) acquisition
D) cash disbursement

Question

Quizplus · Accepted Answer

A spin-off is a transaction where a parent company distributes shares of a subsidiary to its shareholders as a separate, independent company. This differs from a merger or acquisition where two companies combine, and cash disbursements refer to paying out cash dividends to shareholders.

A Firm Can Distribute Shares of a Subsidiary in a Transaction