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Re: The stock price of Foxel, a baby formula manufacturer, is expected to [#permalink]
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gmatbusters wrote:
The stock price of Foxel, a baby formula manufacturer, is expected to rise significantly, mainly due to the company's presence in developing countries, in which the birth rate is quite high and the average consumption of baby formula is rising.

Which of the following, if true, would most strengthen the argument that Foxel’s stock price is expected to rise?

A) Investors thoroughly examine companies’ costs and revenues and invest in companies whose markets are expected to grow.
B) In many developing countries, the higher the birth rate, the lower the sales of baby formula products.
C) The average consumption of baby formula is expected to grow at a much higher rate in developing countries.
D) Foxel intends to launch a massive advertising campaign encouraging the use of birth control in developing countries.
E) In many developing countries, the use of baby formula is regarded as virtually impossible due to lack of adequate sanitary conditions.


Try to negate option (A) the conclusion shatters about the expected rise in stock prices of the company.
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Re: The stock price of Foxel, a baby formula manufacturer, is expected to [#permalink]
GMATNinja Please help with this one. I am not able to understand why A is correct over C

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Re: The stock price of Foxel, a baby formula manufacturer, is expected to [#permalink]
janadipesh wrote:
GMATNinja Please help with this one. I am not able to understand why A is correct over C

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IMHO, the stimulus already considers the growing demand for baby foods in Developing countries in comparison to other countries and as such option (C) is just a mere re statement of this statement presented in the stimulus.
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Re: The stock price of Foxel, a baby formula manufacturer, is expected to [#permalink]
janadipesh wrote:
Please help with this one. I am not able to understand why A is correct over C

Thanks


I marked A over C because the growing consumption of the baby formula is going to reflect in the revenues (and hence the overall value of the company) at a later date than would the surge of money from the investors.

For example, some economic policy X might help a company in the long run however there would be an immediate surge of investment as soon as that policy is announced, raising the stock prices.
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The stock price of Foxel, a baby formula manufacturer, is expected to [#permalink]
I'd actually choose A, however C also seems to be reasonable, having some doubts about that... Actually, speaking of baby formula manufacturers, now all mothers will understand what I'm talking about, it's actually hard to choose the most organic one and to choose the most suitable formula for your baby without minimum pains and victims. For my baby-boy the most suitable turned out to be hipp organic formula and I'm really grateful that I discovered this online store with baby organic food, I firstly thought that the prices would be even higher than the sky, however it worked out perfectly as prices were much lower than in our local shops.
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The stock price of Foxel, a baby formula manufacturer, is expected to [#permalink]
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