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Fantastic Fiction Publishing House is a publisher of fiction novels. This publishing house hires a CEO. They also pay the authors of published novels.
a) Would it make relatively more sense for authors to be paid according to the sales figures of the novels that they wrote? Or the sales figures of Fantastic Fiction Publishing House as a whole? Explain your answer.
b) Would it make relatively more sense for the CEO of Fantastic Fiction Publishing House to be paid based on the sales figures of Fantastic Fiction Publishing House as a whole, relative to individual authors. Explain your answer.
c) Imagine that Fantastic Fiction Publishing House decides to pay their authors (at least in part) with stock options. Do you believe that this a good method of payment? Why or why not?
d) Imagine that Fantastic Fiction Publishing House decides to pay their CEO (at least in part) with stock options. Do you believe that this a good method of payment? Why or why not?
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