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Define each of the following terms: a.

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I 1. How is it possible for an employee stock option to be valuable even if the firm’s stock price fails to meet shareholders’ expectations?
2. Define each of the following terms:
a. Optimal distribution policy
b. Dividend irrelevance theory; bird-in-the-hand theory; tax effect theory
c. Signaling hypothesis; clientele effect
d. Residual distribution model; extra dividend

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