Quiz Ch 32 – T/F Carve-Outs and Spin-Offs
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Carve-outs and spin-offs are indistinguishable from each other.
True or false: Carve-outs and spin-offs are indistinguishable from each other.
True or false: Within private-equity partnerships, the general partners predominantly invest capital and, in return, receive a management fee and a carried interest in the fund’s profits.
True or false: A spin-off involves crafting a new and independent entity by divesting certain assets from a parent company and selling them to new investors.
True or false: In the reorganization of significant public companies, the Securities and Exchange Commission (SEC) assumes a pivotal role by ensuring the disclosure of relevant information to creditors before they vote on the proposed plan.
True or false: The government emerges as a major beneficiary in privatization as it receives revenues from the sale.
True or false: Junk bonds are a common source of financing for Leveraged Buyouts (LBOs).
True or false: LBOs are results of shareholder value NOT maximized by managers.
True or false: Private-equity partnerships navigate around the inherent free cash flow challenge that conglomerates commonly confront.
True or false: In the United States, Chapter 7 and Chapter 11 of the 1978 Bankruptcy Reform Act outline the two common types of bankruptcy procedures.
True or false: A privatization entails transferring ownership of a government-owned company to private investors through a sale.