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# In a leveraged buyout, investors borrow huge sums of money

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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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18 Jul 2011, 08:22
I agree that answer should be E..
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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22 Jul 2011, 14:35
gmataspirant2009 wrote:
tejal777 wrote:
c'mon guys..explanations pleease!

investors borrow huge sums of money to buy companies, hoping to pay off the debt with the companys' earnings and to profit richly by the later resale of the companies or their divisions.

The inverstors hope to pay off... and to profile richly later is correct parallelism.

investors borrow huge sums of money to buy companies, hoping to pay off the debt by using the company's earnings and by profiting by the later resale of the companies or their divisions.
If you make "earnings" and "profiting" parallel, it will mean that the investors hope to pay off debt by selling the company later. Moreover "by profiting" makes the setence meaning awakward. If inversters hoped to pay off the debt using the profit the correct sentence should have been-

In a leveraged buyout, investors borrow huge sums of money to buy companies, hoping to pay off the debt by using the company's earnings and by the profit of later resale of the companies or their divisions.

I agree with explanation of why "by profiting" is correct. But are your sure that the final sentence, usage of "by the profiting", correct?

According to MGMAT SC, ONLY complex gerunds and action nouns can be made parallel. Using that rule the ONLY ways "by the profiting" could be used are if somehow "by using", a simple gerund, is turned into a complex gerund OR an action noun: such as "by the using of" (complex gerund - sounds awkward though) or "by the use of" (action noun - better but still feel on the awkward side - "usage" would be even more awkward). Anyways, I think your suggestion is wrong, but please feel free to correct me if I missed a rule or something here!
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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30 Jul 2011, 10:07
The speculators or those heavy borrowers of money for leveraged buy-outs do so in the hope 1) to close the loans with the profits tht the companies earn and 2) then to profit hugely by the sale of those companies. Thus there are two functions of their hoping (to pay off and to profit), which are required to be //. Any choice using profiting is therefore grammatically incorrect. Only A and E cross the mark. In A, ‘the company’s’ is grammatically wrong since it is singular. We need the plural possessive ‘the companies’. E is right.

This is as simple as that IMO The strategy is to simplify the issue to the core rather than complicate.
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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31 Jul 2011, 04:00
First of all we should see the paralel structure: hoping to pay off... and to profit.

This help us eliminate the B, C an D.

than we should notice that "to buy companies" not "company", so next in the text we should use "companies' " and not "company's "

So E
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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03 Aug 2011, 09:47
The rule is very clear "In possessives placement of ' is based on the noun is singular or plural" In this case earnings is plural hence companys' should be used. IMO E
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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08 Mar 2012, 23:02
what is wrong with choice A as it is also having parallel form
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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10 Mar 2012, 19:16
IMO E

Explaination:
A and E shows parallelism so B,C,D are eliminated.
In GMAT active voice is preferred in comparison to passive so E is the best.
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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23 Mar 2012, 12:19
E would be the answer in my opinion
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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13 Jun 2013, 09:21
joemama142000 wrote:
joemama142000 wrote:
In a leveraged buyout, investors borrow huge sums of money to buy companies, hoping to pay off the debt by using the companyâ€™s earnings and to profit richly by the later resale of the companies or their divisions.

(A) by using the companyâ€™s earnings and to profit
(B) by using the companiesâ€™ earnings and by profiting
(C) using the companiesâ€™ earnings and profiting
(D) with the companyâ€™s earnings, profiting
(E) with the companiesâ€™ earnings and to profit

the OA is E

this is a case of parallelism
hoping to pay.... and to profit
B, C, D are out

by using is wordier than with so E is preffered

I have a doubt:
no one has paid any attention to the word "richly" - it can modify a verb "profiting" but not noun "to pay"
and hoping can be considered parallel to profiting
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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11 Mar 2014, 17:17
Even I have doubt with adverb "richly".shouldnt it modify the nearest verb
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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12 Mar 2014, 10:43
stick the sentence as whole, do not stress to much in nuances

Quote:
OA - E

B, C, D - incorrect - violating parallelism - Need to profit to maintain the parallel structure.

A - incorrect - uses company's (singular)

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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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05 Mar 2015, 04:00
Since the non-underlines portion of the sentence uses companies...so E is correct
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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18 Apr 2016, 10:09
What is the difference between with and by using?
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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18 Apr 2016, 10:18
miliya23 wrote:
What is the difference between with and by using?

Hi,
with can be used for various purposes..
here 'with' is basically telling us 'using'.. Q uses this form
with could be used to express feelings such as with anger etc..
'with' could also be used to show togetherness.. i was with him etc

By is to show means or method.. Please come by air at the earliest..
Also to show action in PASSIVE voice..

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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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18 Apr 2016, 21:29
Hi All,

Request to explain the complete structure of the question . What each line signifies and then the use of the option to co-relate to the structure .
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In a leveraged buyout, investors borrow huge sums of money [#permalink]

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19 Apr 2016, 12:28
abhisheknandy08 wrote:
Hi All,

Request to explain the complete structure of the question . What each line signifies and then the use of the option to co-relate to the structure .

The original meaning of the sentence is that the investors hope two things: to pay off debt and to profit. Only option A and E maintain this parallelism.

B. Implies that the investors hope to pay off debt in 2 ways: 1. by using and 2.by profiting. This is not the intended meaning.
The action "pay off" and "profit" should be parallel, not "use" and "profit".

C. Same reason as that in B.

D. Implies that the investors borrow money because: 1. they hope (hoping) and 2. they profit (profiting). The action "pay off" and "profit" should be parallel, not "hope"and "profit". Moreover the conjunction "and" is missing before "profiting". The first part of the sentence mentions many companies whereas the latter part deals with one particular company (..with the company's...)

A. The first part of the sentence mentions many companies whereas the latter part deals with one particular company (..by using the company's...). Moreover option E is more concise than option A since it uses "with" rather than "by using".
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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23 Apr 2016, 07:14
joemama142000 wrote:
In a leveraged buyout, investors borrow huge sums of money to buy companies, hoping to pay off the debt by using the company's earnings and to profit richly by the later resale of the companies or their divisions.

(A) by using the company's earnings and to profit

(B) by using the companies' earnings and by profiting

(C) using the companies' earnings and profiting

(D) with the company's earnings, profiting

(E) with the companies' earnings and to profit

Parallelism at play here: "borrow to buy AND to profit". So left with A and E.

companies' is right possessive form. (when s comes in the end just use ' else use 's)
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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23 Apr 2016, 09:03
though this is official question

"by resale of" is wrong. in official answer.

do you agree with me?
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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23 Apr 2016, 09:29
thangvietnam wrote:
though this is official question

"by resale of" is wrong. in official answer.

do you agree with me?

First of all i don't know if this is an official questions. But i do not think 'by the later resale of' is wrong.

when i read the following without any fluff, nothing seems wrong to me:

"Investors borrow money to buy companies, hoping to pay off debt and to profit richly by resale of the companies."

what makes you think it is wrong?
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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24 Apr 2016, 04:34
It is a question of parallelism. Hoping to do two things 1. to pay and 2. to profit. Hence "B","C", and "D" are out. Between "A" and "E" the difference is "Company's" and "companies' ." In this case companies are plural . Hence we need a plural apostrophe. Therefore "E" is the answer.
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Re: In a leveraged buyout, investors borrow huge sums of money   [#permalink] 24 Apr 2016, 04:34

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# In a leveraged buyout, investors borrow huge sums of money

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