Which of the following is the best definition of divestiture?
A) The sale of stock in a wholly owned subsidiary via an IPO.
B) A targeted share repurchase method.
C) The sale of assets, operations, divisions, and/or segments of a business to a third party.
D) Investment in more than one asset; returns do not move proportionally in the same direction at the same time, thus reducing risk.
E) Rules and practices relating to how corporations are governed by management, directors, and shareholders.

Question

Quizplus · Accepted Answer

Divestiture refers to the process of selling off subsidiary business interests or investments, which is accurately described by option C as the sale of assets, operations, divisions, and/or segments of a business to a third party. This is a strategic move often made to focus on core operations, raise capital, or comply with regulatory requirements.

Which of the Following Is the Best Definition of Divestiture