For this assignment you will explore different corporate restructuring methods and determine how they protect the interests of the shareholders. Suppose your company is not performing well and is in...

Running Head: CORPORATE FINANCE        1
CORPORATE FINANCE        4
CORPORATE FINANCE
There are multiple methods of corporate restructuring and the choice of the method depends upon the demand of the situation. Such methods include Joint Ventures, Spin-off, Divestures, Split-ups, and others. Divestures is an economic event through which a specific division or a portion of the assets of an organization is sold to other organization. The same is sold for an exchange of cash or any other asset to a third party. According to Rakhmayil (2018), the purpose of Divestures is fulfilling the requirement of cash, defending against takeover, change of corporate strategy or others. There are various types of divestures, demerger, and partial sell-off and so on. Sometimes, the assets are sold to pay off the external debt.
In case of equity carve out; a parent organization sells securities of a subsidiary company to the public. The purpose of the same is to increase the cash flow of the parent company. It leads to inflow of cash thereby reducing the operational risk, which leads to an increase in...