What part of a plant divides to form new lateral growth?

The cambium is the correct answer because it is a layer of actively dividing cells located between the xylem and phloem in vascular plants. This meristematic tissue is responsible for secondary growth, allowing the plant to increase in girth. As the cambium divides, it produces new xylem cells on the inside and new phloem cells on the outside, leading to lateral growth of the plant.

The other choices do not play a role in lateral growth. Xylem is involved in the transport of water and nutrients from the roots to the rest of the plant but does not contribute to division or growth. Phloem is responsible for transporting organic nutrients, primarily from the leaves to other parts of the plant, but it does not divide to create lateral growth. Bark is the outer protective layer of woody plants, formed from the phloem and other tissues, but it is not directly responsible for the division and formation of new growth.