A typical employee stock option and an american call option

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1. Why was it attractive for companies to grant at-the-money stock options prior to 2005? What changed in 2005?

2. What are the main differences between a typical employee stock option and an American call option traded on an exchange or in the over-the-counter market?

3. Explain why employee stock options on a non-dividend-paying stock are frequently exercised before the end of their lives, whereas an exchange-traded call option on such a stock is never exercised early.

Reference no: EM131237606

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