Send us Feedback

PNC Financial Services (PNC)
Analysis
SUMMARY
BULLS
BEARS
TOPICS
Data
DATA CENTRAL
STOCK CHART
Financials
SEC FILINGS
BALANCE
INCOME
CASH FLOW

PNC » Topics » O PTION P RICING A SSUMPTIONS

This excerpt taken from the PNC 10-K filed Mar 2, 2009.

OPTION PRICING ASSUMPTIONS

For purposes of computing stock option expense, we estimated the fair value of stock options primarily by using the Black-Scholes option-pricing model. Option pricing models require the use of numerous assumptions, many of which are very subjective.

We used the following assumptions in the option pricing models to determine 2008, 2007 and 2006 stock option expense:

  •  

The risk-free interest rate is based on the US Treasury yield curve,

  •  

The dividend yield represents average yields over the previous three-year period,

  •  

Volatility is measured using the fluctuation in month-end closing stock prices over a period which corresponds with the average expected option life, but in no case less than a five-year period, and

  •  

The expected life assumption represents the period of time that options granted are expected to be outstanding and is based on a weighted average of historical option activity.

 

Weighted-average for the year ended
December 31		    2008     2007      2006  

Risk-free interest rate

    3.1 %   4.8 %    4.5 %

Dividend yield

    3.3     3.4      3.7  

Volatility

    18.5     18.8      20.5  

Expected life

    5.7 yrs.     4.3 yrs.      5.1 yrs.  
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki