Multiple Choice
Which of the following is an advantage of a spin-off versus selling a subsidiary and distributing the cash?
A) A spin-off increases the transaction costs associated with selling the subsidiary.
B) Shareholders must immediately pay capital gains taxes versus ordinary income taxes on the value of the spin-off.
C) A spin-off guarantees a lower cost of capital.
D) The spin-off is not taxed as a cash distribution.
Correct Answer:
Verified
Correct Answer:
Verified
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