Which of the following statements describes the reasons why the application of the Black/Scholes model overstates the fair value of executive stock options (ESOs) on the grant date? The intrinsic value of the ESO is assumed to equal the expected present value of the ex-post cost of the ESO. The manager receiving the SO is assumed to reach his or her reservation utility. The issuance of new shares when ESOs are exercised is assumed not to affect share prices. The Black/Scholes model assumes that the options will be held to maturity, but holders can exercise the options any time before expiry