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(TCO J, L) Warrants are often used to compensate top executives in firms. Often, these warrants cannot be exercised until a distant expiration date. This

(TCO J, L) Warrants are often used to compensate top executives in firms. Often, these warrants cannot be exercised until a distant expiration date. This form of compensation is used to align the managers incentives with the maximization of the shareholders wealth. Explain how the managers receiving warrants might thwart the efforts to change his or her incentives.

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