hard · LSAT Logical Reasoning

A corporation's net income declined by eight percent last year compared to the year before, yet the company's reported earnings per share rose slightly over the same period.

Which one of the following, if true, most helps to explain this apparent inconsistency?

  1. The company repurchased a substantial number of its own shares, shrinking the share count used to calculate earnings per share overall.
  2. Analysts who cover the company had, on average, forecast an even steeper income decline than the eight percent decline actually reported.
  3. The company's primary competitor suffered a considerably larger net income decline over the same period and lost further market share.
  4. Several senior executives at the company received performance bonuses tied directly to its stock price during the year in question.
  5. Total company revenue grew modestly during the year even as one-time restructuring charges caused overall net income to fall that year.

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