Walter Maxim,the CEO of Digital Storage Devices Has Been Granted

question 12

Essay

Walter Maxim,the CEO of Digital Storage Devices has been granted options on 300,000 shares.The equity is currently trading at £27 a share and the options are at the money.The volatility of the equity has been about .15 on an annual basis over the last several years.The option mature in 5 years,become exercisable in 3 years,and the risk free rate is 4%.
If Mr.Maxim earned £500,000 in regular annual salary why might why might he prefer to have £1,500,000 in straight salary versus salary and options?

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Definitions:

Professional Communication

The exchange of information and ideas in a clear, concise, and respectful manner within a workplace or business context.

Direct Approach

The direct approach in communication involves stating the main point or purpose at the beginning, followed by supporting details, often used in business and technical writing.

Business Communication

The sharing of information between people within an organization that is performed for the commercial benefit of the organization.

Skeptical Audience

A group of listeners or viewers who are inclined to doubt or question the validity of the information presented to them.