CHIC » Topics » Calculation of Fair Value of Stock Options

These excerpts taken from the CHIC 10-K filed Dec 9, 2008.

Calculation of Fair Value of Stock Options

The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a multiple option award approach. The expected life of options represents the period of time the options are expected to be outstanding and is based on historical trends and other subjective factors. The expected stock volatility is based on the average of historical volatility of the Company’s common stock and other subjective factors. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time awards are granted, and the expected dividend rate takes into account the absence of any historical payments and management’s intention to retain all earnings for future operations and expansion.

The following table presents the weighted average assumptions used in the pricing model for stock options granted during the following periods:

 

Stock Options:

   Years Ended  
   September 27,
2008
    September 29,
2007
    September 30,
2006
 

Expected life (years)

     2.5       4.7       3.9  

Expected volatility

     51 %     45 %     48 %

Expected dividend yield

     0 %     0 %     0 %

Risk-free interest rate

     3.2 %     4.7 %     4.6 %

Fair value per option granted

   $ 5.17     $ 11.71     $ 9.03  

Calculation of Fair Value of Stock Options

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a multiple option award approach. The
expected life of options represents the period of time the options are expected to be outstanding and is based on historical trends and other subjective factors. The expected stock volatility is based on the average of historical volatility of the
Company’s common stock and other subjective factors. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time awards are granted, and the expected dividend rate takes into account the absence of any historical
payments and management’s intention to retain all earnings for future operations and expansion.

The following table presents the
weighted average assumptions used in the pricing model for stock options granted during the following periods:

 







































































































Stock Options:

  Years Ended 
  September 27,
2008
  September 29,
2007
  September 30,
2006
 

Expected life (years)

   2.5   4.7   3.9 

Expected volatility

   51%  45%  48%

Expected dividend yield

   0%  0%  0%

Risk-free interest rate

   3.2%  4.7%  4.6%

Fair value per option granted

  $5.17  $11.71  $9.03 
This excerpt taken from the CHIC 10-K filed Nov 28, 2007.

Calculation of Fair Value of Stock Options

The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a multiple option award approach. The expected life of options represents the period of time the options are expected to be outstanding and is based on historical trends and other subjective factors. The expected stock volatility is based on the average of historical volatility of the Company’s common stock and other subjective factors. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time awards are granted, and the expected dividend rate takes into account the absence of any historical payments and management’s intention to retain all earnings for future operations and expansion.

The following table presents the weighted average assumptions used in the pricing model for stock options granted during the following periods:

 

     Years Ended  

Stock Options:

  

September 29,

2007

   

September 30,

2006

   

September 24,

2005

 

Expected life (years)

     4.7       3.9       4.0  

Expected volatility

     45 %     48 %     47 %

Expected dividend yield

     0 %     0 %     0 %

Risk-free interest rate

     4.7 %     4.6 %     4.0 %

Fair value per option granted

   $ 11.71     $ 9.03     $ 7.02  

 

F-15


This excerpt taken from the CHIC 10-Q filed Jan 26, 2007.

Calculation of Fair Value of Stock Options

 

The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a multiple option award approach. The expected life of options represents the period of time the options are expected to be outstanding and is based on historical trends and other subjective factors. The expected stock volatility is based on the average of historical volatility of the Company’s common stock and other subjective factors. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time awards are granted, and the expected dividend rate takes into account the absence of any historical payments and management’s intention to retain all earnings for future operations and expansion.

 

The following table presents the weighted average assumptions used in the pricing model for stock options granted during the following periods:

 

     Three Months Ended  

Stock Options:

  

December 30, 2006

(13 weeks)

   

December 24, 2005

(13 weeks)

 

Expected life (years)

     3.8       4.1  

Expected volatility

     45 %     48 %

Expected dividend yield

     0 %     0 %

Risk-free interest rate

     4.5 %     4.3 %

Fair value per option granted

   $ 9.47     $ 6.40  

 

This excerpt taken from the CHIC 10-K filed Dec 13, 2006.

Calculation of Fair Value of Stock Options

The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a multiple option award approach. The expected life of options represents the period of time the options are expected to be outstanding and is based on historical trends and other subjective factors. The expected stock volatility is based on the average of historical volatility of the Company’s common stock and other subjective factors. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time awards are granted, and the expected dividend rate takes into account the absence of any historical payments and management’s intention to retain all earnings for future operations and expansion.

The following table presents the weighted average assumptions used in the pricing model for stock options granted during the following periods:

 

     Years Ended  

Stock Options:

   September 30,
2006
    September 24,
2005
    September 25,
2004
 

Expected life (years)

     3.9       4.0       4.0  

Expected volatility

     48 %     47 %     55 %

Expected dividend yield

     0 %     0 %     0 %

Risk-free interest rate

     4.6 %     4.0 %     3.3 %

Fair value per option granted

   $ 9.03     $ 7.02     $ 6.09  
This excerpt taken from the CHIC 10-Q filed Jul 28, 2006.

Calculation of Fair Value of Stock Options

 

The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a multiple option award approach. The expected life of options represents the period of time the options are expected to be outstanding and is based on historical trends and other subjective factors. The expected stock volatility is based on the average of historical volatility of the Company’s common stock and other subjective factors. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time awards are granted, and the expected dividend rate takes into account the absence of any historical payments and management’s intention to retain all earnings for future operations and expansion.

The following table presents the weighted average assumptions used in the pricing model for stock options granted during the following periods:

 

    
   Three Months Ended

    Nine Months Ended

 

Stock Options:


   June 24,
2006


    June 25,
2005


    June 24,
2006


    June 25,
2005


 

Expected life (years)

     3.6       4.0       4.0       4.0  

Expected volatility

     48 %     55 %     48 %     55 %

Expected dividend yield

     0 %     0 %     0 %     0 %

Risk-free interest rate

     4.9 %     3.9 %     4.4 %     3.9 %

Fair value per option granted

   $ 8.40     $ 6.06     $ 6.57     $ 5.36  

 

This excerpt taken from the CHIC 10-Q filed May 1, 2006.

Calculation of Fair Value of Stock Options

 

The Company estimates the fair value of stock options granted using the Black-Scholes-Merton (“BSM”) option valuation model and a multiple option award approach. The expected life of options represents the period of time the options are expected to be outstanding and is based on historical trends and other subjective factors. The expected stock volatility is based on the average of historical volatility of the Company’s common stock and other subjective factors. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time awards are granted, and the expected dividend rate takes into account the absence of any historical payments and management’s intention to retain all earnings for future operations and expansion.

The following table presents the weighted average assumptions used in the pricing model for stock options granted during the following periods:

 

    
   Three Months Ended

    Six Months Ended

 

Stock Options:


   March 25,
2006


    March 26,
2005


    March 25,
2006


    March 26,
2005


 

Expected life (years)

     3.8       4.0       4.0       4.0  

Expected volatility

     48 %     55 %     48 %     55 %

Expected dividend yield

     0 %     0 %     0 %     0 %

Risk-free interest rate

     4.5 %     4.1 %     4.4 %     4.1 %

Fair value per option granted

   $ 7.27     $ 5.32     $ 6.50     $ 5.32  

 

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