Despite recent increase in sales

[joehurundas]

Despite the recent increase in sales and cash flow that have propelled automobile companies' common stocks to new highs, several industry analysts expect automakers, in order to conserve cash, to set dividends more conservatively than they were

1) to set dividends more conservatively than they were
2) to set dividends more conservatively than they have been
3) to be more conservative than they have been in setting dividends
4) that they will be more conservative than they were in setting dividends
5) that they will be more conservative than they have been to set dividends

I was able to eliminate D & E (idiom should be "expect automakers to". Between B and C, the former is ambiguous in its use of "they"; The later, on the other hand, is wordy..but could that be the answer, and why?

[ugenderr]

I think in B, conservatively', adverb, modifies the action 'setting dividends';I think this is not the intended meaning(?)

and the problem I see in B is that at the end 'have been' is up in the air alone, so it needs a 'setting' not 'to set', which is the implied term at the end of 'have been to set' -- so I think this is wrong.

on the other hand, the meaning in C is clear. analysts are conservative while setting the dividends.

correct me if I am wrong in my logic.

[tim]

Good analysis, ugenderr. The "have been" is really hanging without a verb, and if we impute a verb to that sentence it ends up not being parallel with the indicative verb "set"..

[sandeep.19+man]

I understand the non-parallelism in the following. But in b, does

set dividends more conservatively than they have been set
imply
set dividends more conservatively than they have been set [conservatively]

and

set dividends more conservatively than they have been setting
imply
set dividends more conservatively than they have been setting [dividends]

Thank you

[RonPurewal]

sandeep -- first, i ought to caution you about the dangers of analyzing the grammar of incorrect answer choices. remember that incorrect answers are incorrect! as such, their grammar will not necessarily be reliable, nor will it necessarily provide any sort of valuable lesson (especially without guidance!).

I understand the non-parallelism in the following. But in b, does

set dividends more conservatively than they have been set
imply
set dividends more conservatively than they have been set [conservatively]

if you were going to interpret this in any way, you would probably be forced to interpret it in the way you have interpreted it here: namely, "they" refers to the dividends that have been set...
i'm not sure if that is downright incorrect, since the gmat people are frustratingly inconsistent in their views on pronoun ambiguity. however, it's certainly awkward, since the first half of this construction ("set dividends") has the automakers as its subject/agent, so the sudden switch to a construction whose subject is "dividends" is confusing.

set dividends more conservatively than they have been setting
imply
set dividends more conservatively than they have been setting [dividends]

if you were going to do this, you couldn't end it with just "setting"; you'd have to use "setting them".

[sandeep.19+man]

Thank you very much for the invaluable support.

:)

[tim]

:)