The sale of stock in a wholly owned subsidiary via an initial public offering is referred to as a(n):
A) Split-up.
B) Equity carve-out.
C) Counter-tender offer.
D) White knight transaction.
E) Lockup transaction.

Question

Quizplus · Accepted Answer

An equity carve-out occurs when a parent company sells a portion of the equity of a wholly owned subsidiary to the public through an initial public offering (IPO). This allows the parent company to capitalize on the subsidiary while still maintaining control if it does not sell the entire stake.

The Sale of Stock in a Wholly Owned Subsidiary Via