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QUESTION 1 Identify one advantage and one disadvantage of increasing the options granted to CEOs? Select all of the choices that apply. There might be

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QUESTION 1 Identify one advantage and one disadvantage of increasing the options granted to CEOs? Select all of the choices that apply. There might be more than one correct answer. Incorrect answers will have a NEGATIVE SCORE. So only choose the choices you are sure of!! A The advantage is that, since options increase in value when the firm's stock price increases, the CEO's wealth and incentives will be more closely tied to the shareholders' wealth. B. The disadvantage is that option grants can increase a CEO's incentives to game the system by timing the release of information to fit the option granting schedule or to artificially smooth earnings. C. The disadvantage is that, since options increase in value when the firm's stock price decreases, the CEO's wealth and incentives are less closely tied to the shareholders' wealth. D. The advantage is that option grants will decrease a CEO's incentives to game the system by timing the release of information to fit the option granting schedule or to artificially smooth earnings

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