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The stock price of companies that have high earnings per share growth increases fast.  Because "CEO compensation is tied to the increase in stock price, many companies use cash from operations to buy back shares to increase the overall earnings per share."  However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.
In the passage above, the two bold faced portions play the following roles:
  • a)
    The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.
  • b)
    The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.
  • c)
    The first is a reason to pursue a certain strategy to achieve an goal; the second is that goal
  • d)
    The first is inferred from the opening line of the passage while the second is the key to achieving the first
  • e)
    The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
The stock price of companies that have high earnings per share growth ...
Argument Analysis
The stock price of companies that have high earnings per share growth increases fast.  Because CEO compensation is tied to the increase in stock price, many companies use cash from operations to buy back shares to increase the overall earnings per share.  However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.
Logical Structure:
 
 
 
Pre-Thinking
  1. Statement 1 states the reason for the strategy employed in Statement 2.
  2. The argument disapproves of this strategy.
Answer Choices
A
The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.
This statement correctly captures the roles played by the segments.
B
The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.
While first is the reason or consideration behind the strategy, the argument confidently states that this strategy is mostly counter-productive.  Thus use of “may” undermines the extent to which the argument refutes the strategy.  Second is the strategy but it does not mitigate the first. 
C
The first is a reason to pursue a certain strategy to achieve an goal; the second is that goal
Second is not the goal but means to the goal.  Second is the strategy.
D
The first is inferred from the opening line of the passage while the second is the key to achieving the first
The opening line of the passage simply states a common principle.  In no way CEO compensation information can be inferred from this common principle.
E
The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.
Second is the strategy itself and not the intended outcome.
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The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer?
Question Description
The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer?.
Solutions for The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for GMAT. Download more important topics, notes, lectures and mock test series for GMAT Exam by signing up for free.
Here you can find the meaning of The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice The stock price of companies that have high earnings per share growth increases fast. Because "CEO compensation is tied to the increase in stock price, manycompanies use cash from operations to buy back shares to increase the overall earnings per share." However, in practice, this strategy is often counterproductive as this leaves little cash to be invested in developing new products and services. In the long run this reduces the overall earnings per share and the stock price.In the passage above, the two bold faced portions play the following roles:a)The first is a reason to pursue a certain strategy to achieve an aim, the second is that strategy.b)The first is a consideration raised to support a certain strategy that may be counter- productive; the second is a strategy that can help mitigate the consideration.c)The first is a reason to pursue a certain strategy to achieve an goal; the second is that goald)The first is inferred from the opening line of the passage while the second is the key to achieving the firste)The first is a consideration that is used to justify adopting a certain strategy, the second presents the intended outcome of that strategy.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice GMAT tests.
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