Final answer:
A spin-off in strategic financial management involves creating a new company or division from an existing company. It is done to focus on a specific line of business or unlock the value of an underappreciated asset.
Step-by-step explanation:
In strategic financial management, a spin-off refers to the creation of a new company or division from an existing company. It involves separating a part of the original company's operations and assets to form a separate entity.
Spin-offs are typically done to focus on a specific line of business or to unlock the value of an underappreciated asset. This can also help to increase the overall value of the company by allowing investors to directly own shares in the spin-off.
For example, in 2019, The Walt Disney Company completed the spin-off of its subsidiary, 21st Century Fox. This allowed Disney to focus on its core entertainment business, while 21st Century Fox became a standalone company with its own stock.