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EBAY » Topics » Stock Option Valuation Assumptions

This excerpt taken from the EBAY 10-K filed Feb 17, 2010.

Stock Option Valuation Assumptions

We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used for each respective period:

 

    Year Ended December 31,
    2007   2008   2009

Risk-free interest rates

   4.5%   2.3%   1.7%

Expected life

   3.5 years   3.8 years   3.8 years

Dividend yield

   0%   0%   0%

Expected volatility

   37%   34%   47%

Our computation of expected volatility is based on a combination of historical and market-based implied volatility from traded options on our stock. Our computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.

 

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Table of Contents

eBay Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

 

These excerpts taken from the EBAY 10-K filed Feb 20, 2009.
Stock Option Valuation Assumptions
 
We calculated the fair value of each option award on the date of grant using the Black-Scholes option pricing model. The following weighted-average assumptions were used for each respective period:
 
             
    Year Ended December 31,
    2006   2007   2008
 
Risk-free interest rates
  4.7%   4.5%   2.3%
Expected life
  3.0 years   3.5 years   3.8 years
Dividend yield
  0%   0%   0%
Expected volatility
  36%   37%   34%
 
Our computation of expected volatility is based on a combination of historical and market-based implied volatility from traded options on our stock. Our computation of expected life was determined based on historical experience of similar awards, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior. The interest rate for periods within the contractual life of the award is based on the U.S. Treasury yield curve in effect at the time of grant.
 
Stock
Option Valuation Assumptions


 



We calculated the fair value of each option award on the date of
grant using the Black-Scholes option pricing model. The
following weighted-average assumptions were used for each
respective period:


 



































































             

 

 

Year Ended December 31,

 

 

2006

 

2007

 

2008
 


Risk-free interest rates


 

4.7%

 

4.5%

 

2.3%


Expected life


 

3.0 years

 

3.5 years

 

3.8 years


Dividend yield


 

0%

 

0%

 

0%


Expected volatility


 

36%

 

37%

 

34%






 



Our computation of expected volatility is based on a combination
of historical and market-based implied volatility from traded
options on our stock. Our computation of expected life was
determined based on historical experience of similar awards,
giving consideration to the contractual terms of the stock-based
awards, vesting schedules and expectations of future employee
behavior. The interest rate for periods within the contractual
life of the award is based on the U.S. Treasury yield curve
in effect at the time of grant.


 




EXCERPTS ON THIS PAGE:

10-K
Feb 17, 2010
10-K (2 sections)
Feb 20, 2009

RELATED TOPICS for EBAY:

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