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Split-up restructuring divides the firm so that:
AA single new subsidiary takes over
BThe parent ceases to exist and is broken into two or more independent firms
CAll firms re-list at a higher combined valuation
DExisting shareholders see no change in their holdings (within the standard regulatory framework)
Answer & Solution
Correct answer: B. The parent ceases to exist and is broken into two or more independent firms
1. Identify what the question asks: this concept maps to splitup (§7.2.3).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (B).
_Source: ICAI BoS CA Final Paper 2, Ch 14 "Mergers Acquisitions and Corporate Restructuring"_
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