Asked by Isaiah Tijero on Jul 17, 2024
Verified
The sale of stock in a wholly owned subsidiary via an initial public offering is referred to as a(n) :
A) Split-up.
B) Equity carve-out.
C) Counter-tender offer.
D) White knight transaction.
E) Lockup transaction.
Equity Carve-Out
The sale of stock in a wholly owned subsidiary via an IPO.
Initial Public Offering
The first sale of stock by a private company to the public, marking a transition from a private to a publicly traded company.
Wholly Owned Subsidiary
A company whose entire stock is held by another company.
- Understand the regulatory and legal environment surrounding mergers and acquisitions.
Verified Answer
CP
Conley PetermeierJul 21, 2024
Final Answer :
B
Explanation :
An equity carve-out occurs when a parent company sells a portion of the equity of a wholly owned subsidiary to the public through an initial public offering (IPO). This allows the parent company to capitalize on the subsidiary while still maintaining control if it does not sell the entire stake.
Learning Objectives
- Understand the regulatory and legal environment surrounding mergers and acquisitions.