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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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New post 18 Nov 2009, 22:43
It is not clear..will somebody give a meaningful explaination??

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New post 28 Dec 2009, 11:38
Hi I too got it wrong...
Stuck with C...
A proper look reveals certain stuff...
We need to look for parallelism in the verbs rather than the prepositional phrase.
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.

Since only E satisfies the criterion, the answer should be E....
A really challenging question tooo.....
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New post 04 Jan 2010, 20:39
"We need to look for parallelism in the verbs rather than the prepositional phrase."

I do not think we can applied this rule to every question. I come across many questions in which prepositional phrase parallelism is required.
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New post 12 Jan 2010, 15:11
BCD are out because they are not parallel .... E is preferable over B because by using is wordy
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New post 01 Aug 2010, 11:29
Must be very silly question but plz tell me difference between company's AND companies'.
what is the usage.
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New post 02 Aug 2010, 02:32
appy001 wrote:
Must be very silly question but plz tell me difference between company's AND companies'.
what is the usage.

If I am not wrong Company's refers to one company's owning like XYZ is a company and it's (XYZ company's) profit has reduced while companies' means that it belongs to the list of companies....like XYZ has merged with another financial biggie-ABC and hence the companies' profit have doubled.

Hope that makes sense!
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New post 13 Aug 2010, 08:32
In a leveraged buyout, investors borrow huge sums of money to buy companies, hoping to pay off the debt ........and to profit...................

The non-underlined part of the sentence has 'companies' [plural], hence we need plural companies in the underlined part also.

A is incorrect because it uses company's [singular possessive]

E is correct for using companies' [plural possessive]

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

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New post 28 Jan 2011, 09:12
appy001 wrote:
Must be very silly question but plz tell me difference between company's AND companies'.
what is the usage.


company's - possesive form of one company - singular
company's profit - is the profit of the company

companies' - possesive form of plural companies
companies' objective - is the objective of more companies

Is it clear now?
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New post 08 Mar 2011, 03:33
I agree, the answer should be E. I stuck with C but you can see (pun intended) how that is not correct.
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New post 09 Mar 2011, 01:15
This makes sense now, I looked at the question harder and I see how company's is different from companies'. This could be a hard spot under exam pressure though.
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In a leveraged buyout, investors borrow huge sums of money [#permalink]

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New post 20 Apr 2011, 00:18
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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

What is the rule here? why is E better than A.

Last edited by nguyendinhtuong on 27 May 2017, 03:20, edited 1 time in total.
Merged topic. Please search before posting question.
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New post 20 Apr 2011, 02:21
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First, 'by using earnings' is wordier than 'with earnings'

Also it has to be companies' earnings and not company's earnings


Since in the rest of the sentence companies is used (" to buy companies", " later resale of companies" ) we cant use company's in the singular form here.
That makes A wrong.
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The issue is parallelism and possessive form of a plural.
A-author is taking about several companies;hence,we have have to use plural possessive of companies,not company possessive..[/incorrect]]
B-issue remain in possessive realm with parallelism issue-[color=#BF0000][/incorrect]
C-possessive issue is solved ,but parallelism issue remain. comparing earning to profiting [color=#BF0000]incorrect

D-Ditto as one,participle is incorrectly used there[color=#BF0000][/incorrect]
E-solve both issues and parallel To pay .....To profit.......correct
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New post 21 May 2011, 22:18
it is talking about many companies, so for possessive it has to be companies', which only gives c and e as option. using is awkward, which leaves E.
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New post 13 Jun 2011, 13:30
A is wrong because by... and by.. structure has to be parallel.
"to buy companies" is plural so wee need that in answer choice, E correctly states companies'
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New post 17 Jul 2011, 16:33
I narrowed down to E and A as they both have proper parallel forms: to profit and to pay.

Go with E as the latter part of the sentence uses companies as well.
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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New post 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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New post 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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New post 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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New post 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
Re: In a leveraged buyout, investors borrow huge sums of money   [#permalink] 31 Jul 2011, 04:00

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