BLW Corporation is considering the terms to be set on the options it plans to issue to its executives. Which of the following actions would decrease the value of the options, other things held constant?
A. The exercise price of the option is increased.
B. The life of the option is increased, i.e., the time until it expires is lengthened.
C. The Federal Reserve takes actions that increase the risk-free rate.
D. BLW's stock price becomes more risky (higher variance).
E. BLW's stock price suddenly increases.
Answer: A
You might also like to view...
In some cases, changing one thing in an organization, such as the compensation system, may affect other unintended areas. Why is this?
a. Organizations are highly dynamic and interactive, and will change often in unexpected ways b. Compensation affects employees, which determines the organization’s entire performance c. Change often fails, and this is a symptom of poorly executed change d. Unintended consequences are often logical, but the change leader just hadn’t thought or planned for them
Which statement referring to thought patterns is incorrect?
a. Asians typically use the inductive method of reasoning. b. Thought patterns impact oral communication. c. When using the deductive method of reasoning, one starts with the facts and goes to generalizations. d. Recognizing different thought patterns is important in negotiation with different cultures.
In order to meet the Statute of Frauds requirements, the entire writing must be contained in one
document. Indicate whether the statement is true or false
"Good" market segments should be homogeneous (similar) within, heterogeneous (different) between, substantial, and operational.
Answer the following statement true (T) or false (F)