Question

ABC created a new company, XYZ, from its subsidiary unit and maintained ownership of all of the shares in XYZ. When ABC felt market conditions were favorable, it did an IPO and sold 25 percent of its shares in XYZ. ABC has effectively completed

• a reversal.

• a divestiture.

• an equity carve-out.

• a spin-off.

• a split-up.

Answer 1

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

Equity Carveout is a method by which a parent company forms a subsidiary company and making it standalone.

Then parent company then sells a minority stake in a subsidiary through IPO.

It does it:
1. Cash infusion into the business.
2. To focus on the core business.
3. To know the value of the subsidiary and unlock it.

The answer is: An Equity Carve-out.

Note:
In the spinoff, the shares are distributed to the existing shareholders and not by IPO.  
Divestment is Selling a stake in Subsidiary (It's too broad in the sense).