Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

nterpreting Disclosure on Employee Stock Options Intel Corporation reported the following in its 2018 10-K report. Share-Based Compensation Share-based compensation recognized in 2018 was $1.5

nterpreting Disclosure on Employee Stock Options Intel Corporation reported the following in its 2018 10-K report. Share-Based Compensation Share-based compensation recognized in 2018 was $1.5 billion ( $1.4 billion in 2017 and $1.4 billion in 2016). During 2018, the tax benefit that we realized for the tax deduction from share-based awards totaled $399 million ($520 million in 2017 and $616 million in 2016). We grant RSUs with a service condition, as well as RSUs with both a market condition and a service condition, which we call outperformance stock units (OSUs). We estimate the fair value of Restricted Stock Units (RSUs) with a service condition using the value of our common stock on the date of grant, reduced by the present value of dividends expected to be paid on our shares of common stock prior to vesting. We estimate the fair value of OSUs using a Monte Carlo simulation model on the date of grant. We base expected volatility for OSUs on historical volatility. We based the weighted average estimated value of RSU and OSU grants on the weighted average assumptions for each period as follows. RSUs and OSUs Dec. 29, 2018 Dec. 30, 2017 Dec. 31, 2016 Estimated values $48.95 $35.30 $29.76 Risk-free interest rate 2.4% 1.4% 0.9% Dividend yield 2.4% 2.9% 3.3% Volatility 22.0% 23.0% 23.0% Additional information with respect to RSU activity is as follows. Restricted Stock Unit Awards RSU activity in 2018 was as follows. Weighted Average Number of RSUs Grant-Date (in millions) Fair Value December 30, 2017 100.4 $32.36 Granted 36.4 48.95 Vested (39.5) 31.64 Forfeited (7.4) 36.23 December 29, 2018 89.9 39.07 What amount did Intel record in 2018 for share-based compensation expense? $Answer billion What is the total fair value of RSUs granted in 2018? Enter answer in millions. Round to the nearest million. $Answer million Imagine that during 2018, all employees immediately sold their shares when their RSUs vested. What profit would the employees have made (before tax)? Hint: Use the RSU average grant-date fair value to approximate Intels average stock price in 2018. Enter answer in millions. Round to the nearest million. $Answer million

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Financial Accounting

Authors: Belverd E. Needles, Marian Powers

12th edition

978-1133940562, 1133940560, 978-1285608464, 1285608461, 1133939287, 978-0357693605, 978-1285607047, 128560704X, 978-1133939283

More Books

Students also viewed these Accounting questions

Question

=+Stocking of customer store shelves Hours of shelf-stocking

Answered: 1 week ago