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CS Professional · Corporate Restructuring, Valuation and Insolvency · Planning and Strategy

Which of the following is a form of external restructuring, as distinct from internal restructuring, in a corporate restructuring exercise?

Takeover of another company's controlling stake is external restructuring, because it involves a transaction with another entity. Divisional reorganisation, revised reporting lines and product line rationalisation happen inside one firm, so they are internal restructuring.

  1. ATakeover of another company's controlling stakeCorrect
  2. BDivisional reorganisation within the same legal entity
  3. CRevision of the company's internal reporting lines
  4. DRationalisation of product lines by the same firm

Explanation

External restructuring involves dealings with other entities, such as mergers, acquisitions, takeovers and joint ventures. The other options are changes within the same firm, so they are internal restructuring.

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