Question
Even when the company pays no dividends, there is a tendency for executive stock options to be exercised early (see Section 7.12 for a discussion of executive stock options). Give a possible reason for this.
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Holding a significant amount of wealth in the form of company stock options can be risky, as the executive's financial well-being is heavily tied to the company's performance. By exercising their options early, executives can sell the acquired shares and reinvest Show more…
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