Question

44. In ………… , company distributes its shareholding in subsidiary to its shareholders

thereby not changing the ownership pattern.

a. Spin off

b. Split off

c. Split up

d. Takeover​

Answer 1

C. Split up
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Answer 2

The company is a split-off company.

• It is a type of corporate reorganisation in which a parent firm sells a business unit under certain conditions.
• In this type of company, a divestiture can be structured in a variety of ways.
• The corporation also transfers its subsidiary's stock to its stakeholders, preserving the ownership pattern.
• The present stakeholders of the original business have the opportunity to swap their shares for additional shares in the new firm.