PrepTest 134, Section 2, Question 4
Editorialist: In a large corporation, one of the(26 more words not shown)
Which one of the following,(8 more words not shown)
- AShareholders sometimes will(14 more words not shown)
- BThe president and(18 more words not shown)
- CKeeping a corporation's(13 more words not shown)
- DIn considering where(16 more words not shown)
- EThe president of(14 more words not shown)
Reading the argument
Keeping profits high sounds like something shareholders would want. But the argument still needs to make that connection.
The president is supposed to promote the shareholders' key interests. That tells us whose interests matter. It doesn't yet tell us that high profits advance those interests. The conclusion moves straight from one idea to the other.
What we’re looking for
For a strengthener, connect them: keeping profits high helps the shareholders achieve something important to them. Then the president's duty to promote their interests gives us a reason to include keeping profits high among the president's duties. We aren't trying to show that this is the president's only job.
Working the answers
- A
Shareholders being satisfied with low dividends doesn't help establish a duty to keep corporate profits high. Be careful, too: dividends are payments to shareholders, and low dividends don't necessarily mean low company profits. A company could retain much of its profit. A gives us neither the connection between profits and key interests nor a reason supporting the claimed duty.
- B
Adding the board of directors gives us more people responsible for the shareholders' interests. It doesn't tell us whether high profits serve those interests. Sharing a responsibility also doesn't remove the president's responsibility. The number of people involved doesn't fix the missing connection.
- CCorrect
High profits are likely to advance the shareholders' important interests. Now we have the link: the president must promote those interests, and keeping profits high is likely to promote them. C gives the stated responsibility a direct connection to the duty the editorialist draws from it.
We don't need to establish that profits are the shareholders' only concern. Helping an important interest is enough to strengthen the argument that maintaining profits belongs among the president's duties.
- D
Potential shareholders considering an investment are different from the shareholders whose interests the president must promote. More importantly, caring about more than profitability doesn't show whether profitability is one of the important things they care about. D leaves the needed connection unstated.
- E
Of course the president might have other duties. The argument starts by calling this one of the president's functions and concludes that keeping profits high is a duty. Neither statement claims exclusivity. Listing other functions doesn't establish the particular duty we are trying to support.
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