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A company has included stock options as part of the managers compensation packages. The current stock price of the company is $40. Each stock option
A company has included stock options as part of the managers compensation packages. The current stock price of the company is $40. Each stock option gave the manager the option to buy a stock of the company at $45 two years later (If the manager exercise the option, the manager will pay $45 to buy the share of the company regardless of the market price two years later). Explain how this arrangement can benefit the shareholders of the companying
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