Princeton Enterprises is a diversified company. In addition to its primary business operations, the firm is also the sole shareholder

Princeton Enterprises is a diversified company. In addition to its primary business operations, the firm is also the sole shareholder of a wholly owned subsidiary. As part of its restructuring plan, Princeton has decided to implement an IPO offering for shares in the subsidiary. This offering is equivalent to a 25 percent ownership stake in the subsidiary. What is the distribution of these shares called?    A.  split-up B.  equity carve-out C.  countertender offer D.  white knight transaction E.  lockup transaction Refer to section 26.9

15.

Family Travel Plans is the sole shareholder in its subsidiary, Traveler's Insurance Co. Family Travel Plans has decided to divest itself of its insurance operations and does so by distributing the shares in the subsidiary to the shareholders of Family Travel Plans. This distribution of shares is called a(n):    A.  lockup transaction. B.  bear hug. C.  equity carve-out. D.  spin-off. E.  split-up. Refer to section 26.9

16.

Blasco Distributors has become a large conglomerate. Its board of directors recently concluded that the firm has become so large that it has lost its efficiency. The board further concluded that the firm could be both more efficient and more profitable if it were divided into three distinct and separate firms. The board presented this suggested to the firm's shareholders and those shareholders voted and agreed to divide the firm. Dividing this firm into separate entities is referred to as a(n):    A.  lockup transaction. B.  divestiture. C.  equity carve-out. D.  spin-off. E.  split-up. Refer to section 26.9

17.

Which one of the following statements correctly applies to a legally defined merger?    A.  The acquiring firm retains its identity and absorbs only the assets of the acquired firm. B.  The acquired firm is completely absorbed and ceases to exist as a separate legal entity. C.  A new firm is created which includes all the assets and liabilities of the acquiring firm plus the assets only of the acquired firm. D.  A new firm is created from the assets and liabilities of both the acquiring and acquired firms. E.  A merger reclassifies the acquired firm into a new entity which becomes a subsidiary of the acquiring firm.