1.

Before it found the practice to be too expensive, Microsoft (and a number o

f other firms) was in the habit of repurchasing some of the shares that it iss
ued each year as employees exercised stock options. The rationale, accordin
g to commentators, was to avoid the dilution from shares issued to employe
es.
a. Do share issues from the exercise of employee stock options cause dilutio
n?

Iya. Penerbitan saham di bawah harga pasar melemahkan nilai per saham
dari saham yang ada, karena Opsi saham karyawan (ESO) adalah label yang
mengacu pada kontrak kompensasi antara pemberi kerja dan karyawan yang
memuat beberapa karakteristik opsi keuangan.

b. Do share repurchases reverse dilution?

c. Why would Microsoft feel that repurchasing shares is "too expensive"?

The activity of buying shares will affect the company's business activities
and growth in the future. When Microsoft buys back the stock is too
expensive, it means the stock has a very high value in the market. Too
expensive can also be caused by the fact that there are very few issues shares
and a lot of demand, thus pushing the share price up. If Microsoft
repurchasing shares, that means the issues shares will decrease and will also
affect the value of each share (EPS).