Which of the following best describes an equity carve-out?
A)An equity carve-out is not only a spin-out but also a special type of stock traded in the secondary market.
B)An equity carve-out is not only a spin-out but also a special type of IPO that trades in the secondary market.
C)An equity carve-out is not only a spin-out but also a special type of bond traded in the secondary market.
D)An equity carve-out is not only a spin-out but also a special type of IPO.

Question

Quizplus · Accepted Answer

An equity carve-out is a type of spin-out in which a parent company sells a portion of a subsidiary's stock to the public through an initial public offering (IPO). The subsidiary becomes a separate entity with its own shareholders, but the parent company retains a controlling stake in the subsidiary. Therefore, an equity carve-out is not only a spin-out but also a special type of IPO.

Which of the Following Best Describes an Equity Carve-Out