Which of the following is correct concerning a spin-off?
A) A division of a firm is reconstituted as a new firm.
B) An unprofitable division is divested.
C) A division of a firm is bought by its managers.
D) The spin-off generates no free cash flow.

Question

Quizplus · Accepted Answer

A spin-off involves a division of a firm being reconstituted as a new firm. It is a type of corporate restructuring in which a company creates a new, independent company from one of its existing business units or subsidiaries. The new company usually receives its own assets, intellectual property, and employees, and operates as a separate entity from its former parent company.

Which of the Following Is Correct Concerning a Spin-Off