Question
In: Finance
Family Travel is the sole shareholder in its subsidiary, FT Insurance. Family Travel has decided to...
Family Travel is the sole shareholder in its subsidiary, FT Insurance. Family Travel has decided to divest itself of its insurance operations and does so by distributing the shares in the subsidiary to the shareholders of Family Travel. This distribution of shares is called a(n): Multiple Choice split-up. bear hug. equity carve-out. spin-off. lockup transaction.
Solutions
Expert Solution
The spin-off is a type of divestiture.
In both split off and spin off, the shares of the subsidiary are distributed to the parent company.
In a split-off the shares are distributed in exchange for the shares of the shareholders of the parent company.
In a spin off, the shares of the subsidiary are distributed to the shareholders of the parent company.
So, the correct option is 4.
jeff jeffy answered 2 years agoRelated Solutions
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has been the sole shareholder of a calendar year S-Corporation
since its inception. Eva’s stock basis is $50,000, her debt basis
is $15,000 and she receives a cash distribution of $88,000. There
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