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 by a parent company is a process where the parent company sells a minority stake of its subsidiary through an initial public offering (IPO). This is often done as a precursor to a complete divestiture or spin-off of the subsidiary. The IPO of the subsidiary helps to establish a market value for the subsidiary, making it easier to sell or spin off in the future.

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