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

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Senior Manager
Joined: 08 Nov 2008
Posts: 276

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19 May 2009, 01:40
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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
Why A is wrong ??

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Manager
Joined: 30 Mar 2009
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19 May 2009, 01:56
IMO B

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 --> initially, I think it's the best. But company does not match with companies standing before and after
(B) by using the companies’ earnings and by profiting --> most appropriate choice. No incorrect structure
(C) using the companies’ earnings and profiting --> using standing right behind the debt ridiculuously means the debt uses the companies' earning
(D) with the company’s earnings, profiting --> prepositional phrase with + noun phrase standing here distorts the meaning: the investors hope to pay off both the debt and the company's earning
(E) with the companies’ earnings and to profit --> same error

Last edited by Minheequang on 19 May 2009, 08:10, edited 2 times in total.
Manager
Joined: 13 Mar 2009
Posts: 191

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19 May 2009, 03:17
IMHO, (C)
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 - NOT ||
(B) by using the companies’ earnings and by profiting
(C) using the companies’ earnings and profiting - fully parallel structure
(D) with the company’s earnings, profiting by removing AND new modifying phrase is introduced while nothing to modify
(E) with the companies’ earnings and to profit NOT ||
Director
Joined: 27 Jun 2008
Posts: 525
WE 1: Investment Banking - 6yrs

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19 May 2009, 06:16
C - parallel

In B, if you notice - to pay off the debt by using the company’s earnings and to profit richly by the later - the sentence is awkward with too many "by"s
Director
Joined: 29 Aug 2005
Posts: 835

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19 May 2009, 07:23
tenaman10 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
Why A is wrong ??

tenaman,
please underline all of your SC's and dont post referencing any answer choices. This doesn't serve well other forum users.
SVP
Joined: 07 Nov 2007
Posts: 1757
Location: New York

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19 May 2009, 07:38
tenaman10 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
Why A is wrong ??

hoping to pay off ... to profit

only A and E remain.

investors borrow huge sums of money to buy companies --> plural

A is using company's profit ( single company profit to payoff all companies' profit .. doesn't make sense)

E - usees plural "companies' "

I will go for E.
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Senior Manager
Joined: 08 Nov 2008
Posts: 276

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20 May 2009, 23:38
OA: E ...It question no 2 in Brutal SC document ..
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21 May 2009, 00:20
tenaman10 wrote:
OA: E ...It question no 2 in Brutal SC document ..

Maybe I complicated this answer choice: do something with something is still precise enough in meaning

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Re: SC - LBO   [#permalink] 21 May 2009, 00:20
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