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7. Methods of changing corporate control When two companies get imvolved in each other's brisiness in any form, there are structural changes that take place

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7. Methods of changing corporate control When two companies get imvolved in each other's brisiness in any form, there are structural changes that take place in both comparies. The following is one of the ways in which companies join forces: A private group acquires a firm using a large amount of borrowed funds and sets guidelines for better management of the firm. This statiemnt best describes a Digicon ine has been a leading producer of computer hardware, induding hard dnves and cD.ROW drives, for a couple of decades. More recently, Digicon entered the soltware tnarket, and this divison has grown ta be a msjor oart of Digicon's overall corporate structure. The hardware and software markets are very duferent tines of business, and the frm has struggled at times when making strategic decisions that affect both lnes. Digicon is in the process of spinning oft its software divicon. Which method of changing corgorate control does this example illustrate? Leveraged burout Merger or acquibion Corporate aliance Drestitute Af Digicon proceeds with this transaction as spin-ot, how wil stiares in the new software company likely be apportioned? Shares in the new company will be sold in a public offering. Shares in the new company will be exclusively dutributed to sharoholders in Digicon

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