A spin-off is the separation of a business unit from the parent company to operate as an independent company. The shares of the newly formed company are distributed among the parent company's stockholders.

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A Spin-Off Is When

Question 65

Multiple Choice

A spin-off is when

A) a company buys a security for a very short period of time and then sells it.
B) a bond is retired through the issuance of another bond.
C) part of a company which is usually a distinct business unit is separated from the parent company and shares of the divested company are distributed to the parent's stockholders.
D) a company acquires another company in a different industry.
E) a company acquires another company in the same industry.

Correct Answer: