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Question 2. (10 marks) (a) Briefly explain within 50 words why managers may prefer share repurchases over dividends when managers are compensated primarily by stock options. (Your answer must be handwritten.) (5 marks) (b) Briefly explain within 50 words managers may be reluctant to reduce dividends under a stable (progressive) dividend policy. (Your answer must be handwritten.) ( 5 marks) Question 2. (10 marks) (a) Briefly explain within 50 words why managers may prefer share repurchases over dividends when managers are compensated primarily by stock options. (Your answer must be handwritten.) (5 marks) (b) Briefly explain within 50 words managers may be reluctant to reduce dividends under a stable (progressive) dividend policy. (Your answer must be handwritten.) ( 5 marks)