When a corporate parent creates an independent company and divests it by distributing to its stockholders new shares in the business, it is called
A) a spinoff.
B) a wholly-owned subsidiary.
C) a functional divesture.
D) fully-diluted stock.
E) a restructure.

Question

Quizplus · Accepted Answer

This is because a spinoff is the specific term used to describe this process of a corporate parent divesting an independent company by distributing new shares to its stockholders.

When a Corporate Parent Creates an Independent Company and Divests