Intrinsic Value Per Share Assignment | Homework For You
Share-based compensation recognized in 2015 was $1.3 billion ($1.1 billion in 2014 and $1.1 billion in 2013) During 2015, the tax benefit that we realized for the tax deduction from share-based awards totaled $533 million ($555 million in 2014 and $385 million in 2013)… We use the Black-Scholes option pricing model to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under the 2006 Plan and rights to acquire shares of common stock under the 2006 Stock Purchase Plan. No options were granted in 2015. We based the weighted average estimated value of employee stock option grants and rights granted under the stock purchase plan, as well as the weighted average assumptions used in calculating the fair value, on estimates at the date of grant, as follows
|
Stock Options |
Stock Purchase Plan |
||||||
|---|---|---|---|---|---|---|---|
| 2015 | 2014 | 2013 | 2015 | 2014 | 2013 | ||
| Estimated values | n/a | $3.61 | $3.11 | $6.56 | $5.87 | $4.52 | |
| Expected life (in years) | n/a | 5.1 | 5.2 | 0.5 | 0.5 | 0.5 | |
| Risk-free interest rate | n/a | 1.7% | 0.8% | 0.1% | 0.1% | 0.1% | |
| Volatility | n/a | 23% | 25% | 25% | 22% | 22% | |
| Dividend yield | n/a | 3.6% | 3.9% | 3.1% | 3.2% | 4.0% | |
Additional information with respect to stock option activity is as follows:
|
(In millions) |
Number of |
Weighted Average Exercise Price |
|---|---|---|
| December 29, 2012 | 202.8 | $20.20 |
| Granted | 20.1 | $22.99 |
| Exercised | (65.0) | $18.76 |
| Cancelled and forfeited | (3.0) | $22.58 |
| Expired | (1.9) | $22.56 |
| December 28, 2013 | 153.0 | $21.10 |
| Granted | 0.6 | $25.34 |
| Exercised | (63.7) | $19.87 |
| Cancelled and forfeited | (2.7) | $23.70 |
| Expired | (9.9) | $27.00 |
| December 27, 2014 | 77.3 | $21.30 |
| Granted | — | $– |
| Exercised | (21.9) | $20.34 |
| Cancelled and forfeited | (1.1) | $23.23 |
| Expired | (0.1) | $20.87 |
| December 26, 2015 | 54.2 | $21.65 |
| Options exercisable as of: | ||
| December 28, 2013 | 111.5 | $20.25 |
| December 27, 2014 | 54.7 | $20.29 |
| December 26, 2015 | 43.8 | $21.07 |
(d) What was the intrinsic value per share of the options exercised in 2015? (Hint: Assume that Intel’s stock price was $32.19, on average, during fiscal 2015.)
$ per share
If employees who exercised options in 2015 immediately sold them, what “profit” did they make from the shares? (Round your answer to two decimal places.)
$ million
(e) The tax benefit that Intel will receive on the options exercised is computed based on the intrinsic value of the options exercised. Estimate Intel’s tax benefit from the 2015 option exercises assuming a tax rate of 37%. (Round your answer to two decimal places.)
$ million
(f) What was the average exercise price of the 0.1 million options that expired in 2015?
$ per share. Get Finance homework help today
