QUESTION6 Partially correct Mark 3.33 out of 5.00 P Flag question Interpreting Disclosure on Employee Stock Options Intel Corporation reported the following in its 2015 10-K report. Share-Based Compensation 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 Purchase Plan Stock Options 2014 2013 2015 2014 2013 n/a $3.61 $3.11 $6.56 $5.87 $4.52 .5 0.5 0.5 Risk-free interest rate n/a 1.7% 0.8% 0.1% 0.1% 0.1% n/a 23% 25% 25% 22% 22% n/a 3.6% 3.9% 3.1% 3.2% 4.0% 2015 Estimated values Expected life (in years) n/a 5.1 5.2 Volatility Dividend vield Additional information with respect to stock option activity is as follows Additional information with respect to stock option activity is as follows Weighted Average Number of Exercise OptionsPrice (In millions) December 29, 2012 Granted Exercised Cancelled and forfeited Expired December 28, 2013 Granted Exercised Cancelled and forfeited Expired December 27, 2014 Granted Exercised Cancelled and forfeited Expired December 26, 2015 Options exercisable as of $20.20 $22.99 (65.0 $18.76 (3.0) $22.58 $22.56 $21.10 0.6 $25.34 (63.7) $19.87 (2.7) $23.70 (9.9) $27.00 77.3 $21.30 202.8 20.1 153.0 (21.9) $20.34 (1.1) $23.23 $20.87 $21.65 54.2 December 28, 2013 December 27, 2014 December 26, 2015 111.5 54.7 43.8 $20.25 $20.29 $21.07 (a) What did Intel expense for share-based compensation for 2014? 1.1billion How many options did Intel grant in 2014? 600 thousand shares December 26, 2015 43.8 $21.07 (a) What did Intel expense for share-based compensation for 2014? 1.1 billion How many options did Intel grant in 2014? thousand shares 600 Compute the fair value of all options granted during 2014. (Round your answer to two decimal places.) $2.17mllion Why do the fair value of the option grants and the expense differ? The expense in 2014 is the cost of current and prior years' option grants that vest in the current year.v OThe expense is net of tax and the fair value of the options is pretax. The expense includes both the value of the options and the opportunity cost reflecting the higher price at which the shares could have been sold. The expense is related to the current market price of the stock and the options are granted at historical costs. Mark 1.00 out of 1.00 (c) How many options were exercised during 2015? 21.9 V million shares Estimate the cash that Intel received from its employees when these options were exercised. (Round your answer to one decimal place.) 445.5 million (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.) 21.07xper 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.) 15.99 xmillion (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.) 5.92 xmillion f What was the average exercise price of the 0.1 million options that expired in 2015? $0.2X 0.2x per share QUESTION6 Partially correct Mark 3.33 out of 5.00 P Flag question Interpreting Disclosure on Employee Stock Options Intel Corporation reported the following in its 2015 10-K report. Share-Based Compensation 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 Purchase Plan Stock Options 2014 2013 2015 2014 2013 n/a $3.61 $3.11 $6.56 $5.87 $4.52 .5 0.5 0.5 Risk-free interest rate n/a 1.7% 0.8% 0.1% 0.1% 0.1% n/a 23% 25% 25% 22% 22% n/a 3.6% 3.9% 3.1% 3.2% 4.0% 2015 Estimated values Expected life (in years) n/a 5.1 5.2 Volatility Dividend vield Additional information with respect to stock option activity is as follows Additional information with respect to stock option activity is as follows Weighted Average Number of Exercise OptionsPrice (In millions) December 29, 2012 Granted Exercised Cancelled and forfeited Expired December 28, 2013 Granted Exercised Cancelled and forfeited Expired December 27, 2014 Granted Exercised Cancelled and forfeited Expired December 26, 2015 Options exercisable as of $20.20 $22.99 (65.0 $18.76 (3.0) $22.58 $22.56 $21.10 0.6 $25.34 (63.7) $19.87 (2.7) $23.70 (9.9) $27.00 77.3 $21.30 202.8 20.1 153.0 (21.9) $20.34 (1.1) $23.23 $20.87 $21.65 54.2 December 28, 2013 December 27, 2014 December 26, 2015 111.5 54.7 43.8 $20.25 $20.29 $21.07 (a) What did Intel expense for share-based compensation for 2014? 1.1billion How many options did Intel grant in 2014? 600 thousand shares December 26, 2015 43.8 $21.07 (a) What did Intel expense for share-based compensation for 2014? 1.1 billion How many options did Intel grant in 2014? thousand shares 600 Compute the fair value of all options granted during 2014. (Round your answer to two decimal places.) $2.17mllion Why do the fair value of the option grants and the expense differ? The expense in 2014 is the cost of current and prior years' option grants that vest in the current year.v OThe expense is net of tax and the fair value of the options is pretax. The expense includes both the value of the options and the opportunity cost reflecting the higher price at which the shares could have been sold. The expense is related to the current market price of the stock and the options are granted at historical costs. Mark 1.00 out of 1.00 (c) How many options were exercised during 2015? 21.9 V million shares Estimate the cash that Intel received from its employees when these options were exercised. (Round your answer to one decimal place.) 445.5 million (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.) 21.07xper 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.) 15.99 xmillion (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.) 5.92 xmillion f What was the average exercise price of the 0.1 million options that expired in 2015? $0.2X 0.2x per share