A business unit within a diversified firm may be sold to the public through a(n)
A) corporate spin-off.
B) liquidation.
C) IPO.
D) harvest strategy.

Question

Quizplus · Accepted Answer

Selling a business unit to the public refers to an initial public offering (IPO), where shares of the unit are offered for purchase by the general public. A corporate spin-off involves creating a new separate company for the business unit, and selling shares of that company to the public; it is not the same as selling the unit directly to the public. Liquidation refers to selling off assets of a company to pay off debts, and a harvest strategy involves maximizing short-term cash flow from a business unit before selling it off.

A Business Unit Within a Diversified Firm May Be Sold