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ESOs are slightly different from
regular options, because they don't
have puts and you typically must wait
a specified period before you are
allowed to exercise the option.
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Granting options to employees was


viewed as a good thing because it
(theoretically) aligned the interests of
the employees (normally the key
executives) with those of the common
shareholders.
*

Executives continued to focus primarily on


quarterly performance rather than on the
long term because they were allowed to sell
the stock after exercising the options.
Tax laws allowed managements to manage
earnings by increasing the use of options
instead of cash wages.
+% !

Mversized rewards given by servile


boards to ineffective executives
Repricing options rewards
underperformers at the expense of the
common shareholder
Increases in dilution risk as more and
more options are issued


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Ñhich is the option involved in ESM 

 CALL M IM
  M IM
 LL M IM
 SH M IM

Ans CALL M IM

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áRS is a tool to downsize the employee


strength, ool that helps in retaining
employee««««.
 sacking
 golden handshake
 ESM
 factor analysis

Ans ESM