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[b]A large company has recently increased . . .

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[b]A large company has recently increased . . .

Post Wed Sep 20, 2017 7:05 am
Elapsed Time: 00:00
  • Lap #[LAPCOUNT] ([LAPTIME])
    A large company has recently increased its dividend payments to shareholders. Shareholders had previously been worried about the company's stock price, but are now relieved since increasing dividends generally boosts a company's stock price. However, the shareholders' optimism may be ill-founded since spending money on the payment of dividends often indicates that the company has exhausted more lucrative investments for its cash reserves and that the stock price will likely fall in the longer run.

    In the argument above, the two bold-faced portions play which of the following roles?

    A) The first is evidence that supports a conclusion; the second is that conclusion

    B) The first describes evidence that supports a conclusion; the second gives a reason for questioning that support.

    C) The first describes the circumstance that the argument seeks to explain; the second provides evidence in support of the explanation that the argument seeks to establish.

    D) The first is a premise that is accepted as true; the second is a conclusion that is contrary to the premise.

    E) The first is a premise that is accepted as true; the second seeks to clarify the original premise.

    B is the OA.

    Why is not the option E? I need an expert that helps me here.

    Need free GMAT or MBA advice from an expert? Register for Beat The GMAT now and post your question in these forums!

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