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Employee Stock Option Question

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How is it possible for an employee stock option to be valuable even if the firm's stock price fails to meet shareholder's expectations?

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Solution Summary

This solution briefly discusses how it is possible for an employee stock option to be valuable even if the firm's stock price fails to meet shareholder's expectations.

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There are several ways an employee stock option could be valuable in this case. The option pays off if, at option expiration, the stock price is higher than the option's strike price. The fact ...

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