The Value of the Options Awarded Executives Is Much Less

question 11

Multiple Choice

The value of the options awarded executives is much less than face value to the executives because:

• A)the value to the executive depends on the stock price being greater than the exercise price.
• B)the options must be held beyond the freeze-out period.
• C)a highly undiversified portfolio can have a large drop in value with high variance stocks.
• D)All of the above.
• E)None of the above.

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Definitions:

Variable Costs

Costs that vary directly with the level of production or output.

Snow-Clearing Service

A service provided to remove snow from pathways, driveways, and roads, often essential in regions with heavy snowfall to ensure safety and accessibility.

Minimum Price

A minimum price is the lowest legal price that can be charged for a good or service, set by government regulations to ensure fair practices and prevent market abuses.

Long Run

A period in which all factors of production and costs are variable, and companies can adjust all inputs to the production process.