An equity carve-out by a parent of one of its subsidiaries is often a precursor to a
A) Complete divestiture or spin-off of the subsidiary
B) An acquisition
C) A merger
D) Joint venture
E) The creation of a tracking stock

Question

Quizplus · Accepted Answer

An equity carve-out is a process in which a parent company sells a minority stake in one of its subsidiaries to the public through an IPO. This is often done as a precursor to a complete divestiture or spin-off of the subsidiary, as it allows the parent company to raise capital and establish a market value for the subsidiary. Therefore, the best choice is A.

An Equity Carve-Out by a Parent of One of Its