b. Explain the principal factor accounting for the increase in the fair value of options issued in 1999 compared with options is- sued in 1997 and 1998.

c. State and justify the effect of an increase in each of the fol- lowing on the fair value of options' (i) Expected dividend yield (ii) Risk-free interest rate (iii) Expected stock price volatility (iv) Expected years until exercise

d. Calculate the effect on Pfizer's book value per share at De- cember 31, 1999 of the exercise of all options outstanding with an exercise price below Pfizer's stock price at Decem- ber 31, 1999 of $32.4375.