Corporations often restructure their capital and assets to improve the flow of capital and information and to add value to shareholder wealth.

Restructuring often takes place through spin$-$offs, equity carve$-$outs, partial public offerings, and tracking stocks.

Consider the following statement about equity carve$-$outs:

The subsidiary company can raise capital for itself based on its true valuation as a stand$-$alone company.

Based on your understanding of equity carve$-$outs, is the statement above an advantage of equity carve$-$outs?

No

Yes