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Company H

by Abhijit K » Mon Mar 23, 2015 10:58 pm
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.

C or E?
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Source: — Data Sufficiency |
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by GMATGuruNY » Tue Mar 24, 2015 3:15 am
Abhijit K wrote: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.
Statements combined:
Case 1: Total value of Company H's stock = $32,000
In this case, Q's $16,000 represents 1/2 of Company H's stock, and the value of P's stock = (1/4)(32,000) = $8000.

Case 2: Total value of Company H's stock = $48,000
In this case, Q's $16,000 represents 1/3 of Company H's stock, and the value of P's stock = (1/4)(48000) = $12,000.

Since the total value of Company H's stock can be different values, INSUFFICIENT.

The correct answer is E.
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by [email protected] » Tue Mar 24, 2015 7:28 pm
Hi Abhijit K,

This question is an example of a DS prompt that you can mostly "talk your way through." Most DS questions involve some type of calculations, but a few are more about logic than anything else. It still helps to take notes though....

Here, we're asked for the TOTAL VALUE of Company H's stock.

Fact 1: Investor P owns 1/4 of the shares.

This tells us nothing about the value of those shares nor the value of the total.
Fact 1 is INSUFFICIENT.

Fact 2: The value of Investor Q's shares is $16,000

This tell us nothing about the FRACTION of the shares that Investor Q owns, so we can't figure out the total value of all the shares.
Fact 2 is INSUFFICIENT

Combined, we know....
Investor P owns 1/4 of the shares
Investor Q owns $16,000 worth of shares

Unfortunately, we don't know how many total investors there are, so there is no way to 'link' these two pieces of information. We don't know what Investor P's shares are worth and we don't know what fraction of shares Investor Q owns.
Combined, INSUFFICIENT.

Final Answer: E

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