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

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VP
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28 Feb 2009, 00:53
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Difficulty:

85% (hard)

Question Stats:

39% (02:19) correct 61% (01:02) wrong based on 902 sessions

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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
[Reveal] Spoiler: OA
If you have any questions
New!
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28 Feb 2009, 12:39
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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.

Explanation:
-----------------------
A. by using the company's earnings and to profit ---> Incorrect use of apostrophe in the word company's.
B. by using the companies' earnings and by profiting ---> Incorrect. Not parallel in structure.
C. using the companies' earnings and profiting ---> Incorrect. Not parallel in structure.
D. with the company's earnings, profiting ---> Incorrect use of apostrophe in the word company's.
E. with the companies' earnings and to profit ---> Correct. It uses the apostrophe in the correct place to indicate that companies are involved and NOT just a company. It is also parallel in structure (...to pay off the debt... ...to profit richly...)

JohnLewis1980 has given the correct explanation for the second part.
-----------------------

Clearly option E.

Hope that helps.

Regards,
Technext
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28 Feb 2009, 08:55
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ritula 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

Hi mates,

IMO E

To maintain //ism, the last part of the answer should be "to profit", therefore just A and E left

"hoping to pay [...] and to profit [...]

Now, between A and E, E seems to be simpler than A, so, E

OA and Source?

Cheers
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04 Dec 2009, 06:43
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I choose E

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

The question falls in parallelism category. 'to pay off' is parallel ' to profit' . ' with the companies' earnings' is parallel to ' by the later resale', they have same structure, preposition + N.
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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28 Oct 2012, 23:09
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guys for the answer to be either A or E, should'nt the construction be a bit different; should'nt the construction ".....earnings, and to profit.."
By using the commas, the parallelism seems straight forward but without comma, "hoping to pay off the debt by using the company's earnings and to profit richly by later resale of the companies or their divisions." seems to modify the preceding clause.
verbal experts, please explain where I am missing.
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28 Feb 2009, 07:29
ritula 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

hoping to pay off... and <hoping> to profit

between A and E.

A is better.

"by using " .. better than "with "
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28 Feb 2009, 10:14
I think this should be C

using the companies' earnings and profiting

companies' is used correct and followed the parallelism (using and profiting) ...
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28 Feb 2009, 16:50
E. was my options for reasons posted above
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28 Feb 2009, 17:27
Here the parallelism is as "hoping to pay off.....by......and to profit....by...". A is the only choice left.

Hence, I will go with A.
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28 Feb 2009, 19:12
E

right use of apostrophe and maintains plurality
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28 Feb 2009, 22:53
hoping is common to both ,
to pay off the debt by using and to profit richly by the later are parallel

Hence A.

Company's is right because investors pay off the debt using one company's earnings (each company's earnings) and resale of all the companies...thats the best explanation i could think for Textnext argument.

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28 Feb 2009, 23:34
OA is E
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01 Mar 2009, 12:13
ritula wrote:
OA is E

A bit late to the discussion. I thought it should be A. Do you have the OE as well?
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02 Mar 2009, 06:58
Nope i dnt hv the OE. But Technext explained quite well
sanjay_gmat wrote:
ritula wrote:
OA is E

A bit late to the discussion. I thought it should be A. Do you have the OE as well?
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01 Dec 2009, 11:42
ok this is the first day i am doing . this but in this case how are we supposed to know the right answers?? how do u guys usually settle this
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07 Dec 2009, 03:59
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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

IMO E ..... 'to profit' parallel to 'to buy'
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08 Dec 2010, 10:08
I think the parallelism is between 'to buy 'and 'to profit' while the phrase 'hoping to pay off the debt by using the company's earnings' is simply an adiitive phrase
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08 Dec 2010, 19:00
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Should be E.

I got the answer from somewhere else: The non-underlined part of the sentence uses "companies" (twice), so we need the plural possessive "companies'".
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08 Dec 2010, 22:10
ritula 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

I'll admit I havent seen this question for the first time and know that E is the right answer (because of parallelism between "to pay off" and "to profit", as well as between "buy companies" and "the companies' earnings").

When i saw this question for the first time, I had a hard time accepting the usage of "with" in the sense of "[by] using". Any comments, anyone?
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05 Jan 2011, 11:00
I think issue is parallelism....... to pay........to profit......E
Re: SC: investors   [#permalink] 05 Jan 2011, 11:00

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