GMAT Prep ?? (Company H)

dferm · Posted: Fri May 09, 2008 7:55 am Post subject: GMAT Prep ?? (Company H)

What is the total value of Company H's Stock?

(1) Investor P owns 1/4 of the shares of Company H's total stock.
(2) The total value of Investor Q's shares of Company H's stock is $16,000.

I think the answer is B but not too sure...

Can someone help...

Thanks.

II · Posted: Fri May 09, 2008 10:10 am Post subject:

why do you think the answer is B ? What makes you choose B ?

My thinking is that the answer is E.

Lets take a look at the question stem: "What is the total value of Company H's Stock? "
How do we determine the TOTAL VALUE of a company's stock .. well we need to know the price per share, and the number of shares.
This can be written as:

Value = (# of shares) * (price per share)
v = s * p
Where v = value of company's stock, s = number of shares, p = price per share.
So in order to answer the question, we need to know the number of shares (s) and the price per share (p). Bear this in mind when looking at the statments.

Statement 1:
"Investor P owns 1/4 of the shares of Company H's total stock."

1/4 of what ? 1/4 of 100 ... or 1/4 of 200 ???
We need to know the total number of shares and the price per share to answer the question. Both pieces of information are not provided here. INSUFF.

Statement 2:
"The total value of Investor Q's shares of Company H's stock is $16,000. "
How much of a share does investor Q have. Does he have 1/4 of the share ... 1/2 the shares ??? We dont know this information, and hence cannot determine the total value of company H's stock.

Statements 1 and 2:
Still dont have the information we need: price per share and total number of shares.

So I would go for E.

What is the OA ?

AleksandrM · Posted: Fri May 09, 2008 10:36 am Post subject:

I agree. The answer MUST be E. There is no way to figure out the total from the information given.

Statement one tells you the fraction but does not tell you what dollar amount it represents.

Statement two tells you the dollar amount but does not tell you what fraction it represents.

Taken together you know exactly nothing.