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You are the Chair of the Compensation Committee of a public company. You would like to design a compensation package for the CEO that aligns

You are the Chair of the Compensation Committee of a public company. You would like to design a compensation package for the CEO that aligns his/her interests to the interests of the shareholders. How would you design the CEO compensation package? What would you add/change if you want to give the CEO incentives to take a high level of risk?

Describe how equity can be thought of as a call option. Develop a numerical example.

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