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

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The transaction described is a spin-off, where a parent company creates a new company with its own shares by issuing shares of a division or subsidiary previously owned by the parent company. A divestiture involves selling a company or a portion of a company, while a reverse split involves reducing the number of shares outstanding by consolidating shares.

When a Parent Company Creates a New Company with Its