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

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Manager
Joined: 11 Apr 2009
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02 Jun 2009, 10:53
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Question Stats:

63% (01:18) correct 38% (00:00) wrong based on 25 sessions

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２． 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

Can anyone explain why the answer is not A?
If you have any questions
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Manager
Joined: 01 May 2009
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03 Jun 2009, 00:58
gmatprep09 wrote:
２． 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 -Parallelism error - 'to profit' should be parallel to 'hoping' but not to 'to pay off'
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

Can anyone explain why the answer is not A?

I am stuck between option C and D, but C looks better than D.

So C could be the correct answer.

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03 Jun 2009, 04:52
I will prefer A.

To pay...........and..........to profit.
Senior Manager
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03 Jun 2009, 06:24
I will go with E..

to pay off the debts with companies earnings
to profit by the resale..
whats the oa ?
Manager
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03 Jun 2009, 06:59
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 -not wordy

I'll go with E because the paralleism is correct and not wordy..
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04 Jun 2009, 01:04
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It's E. Because the investors "hope" to pay off the debt and profit richly. Also observe the 3/2 split - eliminate company's because the parent clause is talking about companies.
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08 Jun 2009, 18:22
Oa is E.
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09 Jun 2009, 07:47
1
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gmatprep09 wrote:
２． 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

Can anyone explain why the answer is not A?

I got E for this answer choice. First of all, "with the companies' earnings" is much more concise than saying "by using the companies' earnings." Suppose that you were unable to spot this, the use of "by" suggests a different logic. Example:

1) I was hit by a police. ----> the police performed the act of hitting

Now, according to option A, it suggests that "using" is hoping to pay off the debt. Don't forget, because we have the article "the" after "using", the article has turned "using" into a gerund. Because such a construction is illogical, options A and B are gone.
Option C suggests that the debt is using the companies' earnings....so this answer choice is out.
Option D uses "profiting." We already have the present participle "hoping", so if "profiting" is really suppose to be there, then we should have "and" before it to connect it with "hoping."

Manager
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09 Jun 2009, 21:06
gmatprep09 wrote:
２． 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

Can anyone explain why the answer is not A?

It's can not A because it's not parallel: by + N ....and by the later resale of...
E is parallel: to pay off ....with the companies' earnings....and to profit ....by the later resale of...
Senior Manager
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14 Jun 2009, 01:46
I will chose E...It maintains parallelism...
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Manager
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14 Jun 2009, 09:47
Good one...
parallel structure...
hoping + (to payoff ......to profit)
IMO E too
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Re: In a leveraged buyout, investors borrow huge sums of money [#permalink]

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03 Mar 2015, 09:27
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

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Re: In a leveraged buyout, investors borrow huge sums of money   [#permalink] 03 Mar 2015, 09:27
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