#4 - Carol Morris wants to own a majority of the shares of

[Administrator]

Complete Question Explanation

Strengthen. The correct answer choice is (E)

Here we are told of the aspirations of Carol Morris, who wishes to become the majority shareholder
of the city’s biggest paper, The Daily. Azedcorp, the current majority shareholder, is the only thing
standing in the way of Morris’ goal, and has thus far refused to sell. Despite these facts, however,
industry analysts predict that Morris will soon achieve the goal of becoming majority shareholder.

The stimulus is followed by a Strengthen question, so the correct answer choice will help the
analysts’ prediction that Carol Morris’ goal will soon be achieved. The right answer will likely
either explain why analysts believe that Azedcorp will soon be selling shares, or provide some
other explanation as to how Morris would be able to amass enough shares to become the majority
shareholder.

Answer choice (A): The other holdings in Azedcorp’s portfolio are irrelevant to the analysts’
prediction; this choice does not lend any strength to the assertion that Morris will soon be majority
shareholder, so this choice can be quickly eliminated.

Answer choice (B): This choice does not strengthen the assertion that Morris will soon be able to
purchase sufficient shares to become majority shareholder. If anything, this choice would weaken the
analysts’ assertion, because if Azedcorp has turned down such an appealing offer, this really speaks
to the notion that Azedcorp does is not interested in selling its shares to Morris.

Answer choice (C): Since Azedcorp has steadfastly refused to sell its shares in the past, the fact that
there are no other interested buyers is irrelevant to the question. This choice does not strengthen the
prediction that Morris will soon be majority shareholder, so it cannot be the correct answer choice to
this Strengthen question stem.

Answer choice (D): The author of the stimulus established the fact that Morris is a significant
shareholder in The Daily, and that Azedcorp is the only thing standing in the way of Morris’
becoming majority shareholder. So this choice, which provides that Morris is currently the second
largest shareholder, does not strengthen the prediction that Morris will soon be the majority
shareholder.

Answer choice (E): This is the correct answer choice, and the one which significantly strengthens
the analysts’ argument that Morris will soon be majority shareholder. If Azedcorp is on the brink
of bankruptcy, and will soon be forced to part with its newspaper holdings, then this would allow
Morris to purchase the Azedcorp shares that she has thus far been unable to buy. This choice explains
how, despite Azedcorp’s steadfast refusals in the past, they will soon be forced to concede, allowing
Morris to purchase their shares.

[netherlands]

Hey there PS,

Did I totally miss the conditional reasoning behind this question? I chose B, now going back and seeing that the answer choice was E , Im noticing the phrase " only obstacle" and am thinking there was more to that.

I initially ruled out E because that idea that azdecorp will "probably" be forced to sell didn't seem concrete enough to me - and their being forced to sell doesn't necessarily mean that Carol Morris will become the majority owner.

But should it have been read as: Carol Morris does not receive the majority only if Azdecorp refuses to sell. Meaning, the contrapositive if Azdecorp sells Carol Morris will become the majoriy owner in which case the forced sale could support that contrapositive?

[Steve Stein]

Hey Netherlands,

Thanks for your question. Take another look at this one:

Carol wants to buy the paper, and the only thing standing in her way is A-corp, who has stubbornly refused to sell its shares.

Which answer choice supports the recent prediction that Carol will soon be getting her way?

My prephrase would be something like "The choice that will allow her to get by the only thing standing in her way."

I hope that's helpful! Please let me know whether that's clear--thanks!

~Steve

[deck1134]

Hi PowerScore Staff,

I may be over-thinking this one.

My thought process was as below:

Prephrase: She will have some other way of getting the stock, either Azedcorp sells or she finds another buyer.

Answer choices:
A. Irrelevent
B. Correct Answer; as if she recently offered them funds, then they have not been turned down yet. This is new information, and if a new offer is pending, then she might succeed. I thought about this in the context of flaw questions, that past behavior does not indicate future behavior. While this is not a flaw question, I thought that such logic applied. Should I be thinking about this differently?
C. Irrelevant
D. Does Nothing
E. This will force the sale, but there is no guarantee that Carol Morris will buy them. Because this part of the argument is missing, E cannot be correct.

The above reasoning allowed me to select B, and move on thinking I got it. What should I have done differently? I know this is an 80%-er so I feel foolish.

[Alex Bodaken]

deck1134,

Thanks for the question! Let me see if I can help. You have basically identified the issue at hand: in order for Ms. Morris to own the majority of shares, Azedcorp needs to sell - but they have refused to do so. Yet industry analysists think that she will soon own a majority of shares soon. So what gives? There must be an event that makes Azedcorp want to sell - and that event is going to be our correct answer choice.

In answer choice (B), we don't know that the recent offer Ms. Morris has made will change Azedcorp's mind - it might, but it might not. We don't know the reason that Azedcorp is refusing to sell, and so we have no way of knowing if a high offer will change its mind. But with answer choice (E), we are given a strong reason why Azedcorp would sell: they have to, because they have gone through bankruptcy. While I understand your concern that Ms. Morris won't buy them, the stimulus notes that the only obstacle to her becoming majority stakeholder is Azedcorp's refusal to sell; with this obstacle removed in answer choice (E), we can make a safe assumption that she will buy the shares and become the majority stakeholder.

Hope that helps!
Alex