Question #9
Reading: Reading 18 Corporate Restructuring
PDF File: Reading 18 Corporate Restructuring.pdf
Page: 5
Status: Unattempted
Correct Answer: A
Question
Peter Small, CFA, makes the following statements: Statement 1: In an opportunistic restructuring, a business changes its balance sheet composition, cuts costs, or alters its business model to improve the return on capital. Statement 2: Moderate- to large-sized business units sought by several potential acquirers might be expected to be spun off as opposed to sold. Which statement is correct?
Answer Choices:
A. Neither statement is correct
B. Statement 2 only
C. Statement 1 only
Explanation
Statement 2 is incorrect. Moderate- to large-sized business units sought by several
potential acquirers might be expected to fetch a high sale price; therefore, they are more
likely to be sold than spun off.