|
Stock Options
|
2008
|
2007
|
2006
|
|
Estimated fair values
|
$ 5.74
|
$ 5.79
|
$ 5.21
|
|
Expected life (in years)
|
5.0
|
5.0
|
4.9
|
|
Risk-free interest rate
|
3.0%
|
4.5%
|
4.9%
|
|
Volatility
|
37%
|
26%
|
27%
|
|
Dividend yield
|
2.7%
|
2.0%
|
2.0%
|
Additional information with respect to stock option activity is as follows:
|
(In Millions, Except Per Share Amounts)
|
Number of Shares
|
Weighted Average Exercise Price
|
|
December 31, 2005
|
899.9
|
$26.71
|
|
Grants
|
52.3
|
$20.04
|
|
Exercises
|
(47.3)
|
$12.83
|
|
Cancellations and forfeitures
|
(65.4)
|
$28.07
|
|
December 30, 2006
|
839.5
|
$26.98
|
|
Grants
|
24.6
|
$22.63
|
|
Exercises
|
(132.8)
|
$19.78
|
|
Cancellations and forfeitures
|
(65.4)
|
$31.97
|
|
December 29, 2007
|
665.9
|
$27.76
|
|
Grants
|
27.9
|
$21.81
|
|
Exercises
|
(38.6)
|
$19.42
|
|
Cancellations and forfeitures
|
(42.8)
|
$31.14
|
|
Expirations
|
(2.4)
|
$25.84
|
|
December 27, 2008
|
610.0
|
$27.79
|
1.) What did Intel expense for share-based compensation for 2008? Answer
($ million) How many options did Intel grant in 2008?
2.)Compute the fair value of all options granted during 2008. (Round your answer to one decimal place.)
3.)Estimate the cash that Intel received from its employees when these options were exercised. (Round your answer to one decimal place.)
4.)What was the intrinsic value per share of the options exercised in 2008? (Hint: Assume that Intel grants options at-the-money.)
5.)If employees who exercised options in 2008 immediately sold them, what "profit" did they make from the shares? (Round your answer to one decimal place.)
6.)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 2008 option exercises assuming a tax rate of 34.7%. (Round your answer to one decimal place.)
7.)What was the average exercise price of the options that expired in 2008?