When a parent company creates a new company with its own shares by issuing shares of that company which used to be a division or subsidiary of the parent company,the transaction is called

Question

Quizplus · Accepted Answer

This transaction is called a spin-off, where the parent company creates a new company by issuing shares of a division or subsidiary. A divestiture involves selling off a part of the company, and a reverse split involves reducing the number of outstanding shares of a company to increase their value.

When a Parent Company Creates a New Company with Its