A firm can distribute shares of a subsidiary in a transaction referred to as a

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A spin-off is a transaction where a firm distributes shares of a subsidiary to its existing shareholders, essentially creating a new, separate entity. This is different from a merger, where two companies combine to form a new entity, and an acquisition, where one company purchases another. A cash disbursement is simply an payment of funds, which is not relevant to this scenario.

A Firm Can Distribute Shares of a Subsidiary in a Transaction