Critical Reasoning

Over the past 5 years, Company X has posted double-digit growth in annual revenues, combined with a substantial improvement in operating margins. Since this growth is likely to persist in the future, the stock of Company X will soon experience dramatic appreciation.

The argument above is based on which of the following assumptions?

Company X has a large market share in its industry.

Prior to the last 5 years, Company X had experienced similarly dramatic growth in sales associated with stable or improving operating margins.

The growth of Company X is likely to persist in the future.

The current price of the stock of Company X does not fully reflect the promising growth prospects of the firm.

The stock of Company X will outperform other stocks in the same industry.

Premises are that company X has grown substantially. It has posted huge growth in annual revenues and improved its operating margins substantially. It also expects this growth to continue going forward.

The conclusion states that Company X will soon experience dramatic rise in its stock price. We have to look for an assumption that this argument hinges upon.

D does that perfectly. D states that the current stock price does not fully reflect the future growth of the firm. If the current stock price already took into account this amazing growth, then we would not expect the price to rise much at all.

why "C" is not considered? as it clearly tell us the assumption??????

IMO D.

C is mere a repetition of the fact given in the stimulus.


Gunjan

OA is D

Option D Very tough

OA is D but my brain kinda stopped working on reading option C. Got it wrong.

Thank all guy help me understand why D is the best choice