Exam 28: Divestitures

The liquidity of the assets of the divested company does not play a role in the amount of value created.

Acquisitions occur in waves,but divestitures occur randomly.

Which of the following is the best name for a distribution of all shares in a subsidiary to existing shareholders of the parent company?

Explain the reasons that a parent company may not want to give up control over a business unit it wants to divest and the preferred method of divestment in this case.

According to data on more than 200 carve-outs announced before 1998,carve-out entities do not last.The majority of the subsidiaries were spun off further,acquired,or merged with other players.

Which of the following is the best definition of a trade sale?

Which of the following would be classified as a private divestiture? I.Split-off. II.Carve-out. III.Trade sale. IV.Joint venture.

Whether or not a spin-off is part of a focus-improving strategy can be important with respect to how much value it creates.

Executives seem to shy away from divestitures and usually delay them too long.

With respect to their effect on divestures,which of the following is most accurate concerning legal,contractual,and regulatory barriers?

Which of the following are true concerning private transactions? I.Most are done to financial buyers. II.They tend to capture value more quickly. III.Fiscal implications may affect the decision. IV.They are usually a better choice if identifiable buyers exist.