Boston UniversityHolding Company Split Up Case Discussion Please answer this question based on the picture below. Cookie Monster and Miss Piggy are shareho

Boston UniversityHolding Company Split Up Case Discussion Please answer this question based on the picture below. Cookie Monster and Miss Piggy are shareholders in Parent Holding Company, and Parent Holding Company is the owner of Subsidiary 1 and Subsidiary 2. The image below shows the structure before a split up and the structure after the split up. Please explain what happens to Parent Holding Company after the split up? HINT: Parent company is holding nothing after the split up. Reorganizations – Split Up
• Focus is more on separating businesses for various reasons (management focus,
specialization, regulatory restriction (e.g., SEC merger term), need for cash)
Before Split-Up
Parent
Holding
Company
1
2
Subsidiary 1
After Split-Up
1. Parent
Holding
Company
exchanges
S1 shares
for PHC
shares
Subsidiary 2
Subsidiary 1
2. PHC
exchanges
S2 shares
for PHC
shares
Subsidiary 2
What happened to Parent
Holding Company?
15

Purchase answer to see full
attachment

Submit a Comment