Which of the Following Is Not a Characteristic of a Spin-Off

Multiple Choice

Which of the following is not a characteristic of a spin-off?

A) The parent creates a new legal subsidiary for the business to be spun-off
B) The shares of the new subsidiary are sold to the public
C) The ownership of shares in the new legal subsidiary is the same as the stockholders' proportional ownership of shares in the parent firm
D) The new business once spun-off has its own management and board
E) Spin-offs are generally not taxable to the parent's shareholders if properly structured