Holiday Inn 2007 Annual Report Download - page 84

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82 IHG Annual Report and Financial Statements 2007
25 SHARE-BASED PAYMENTS (CONTINUED)
The Group recognised a cost of £30m (2006 £18m) in operating profit related to equity-settled share-based payment transactions during
the year.
The aggregate consideration in respect of ordinary shares issued under option schemes during the year was £16m (2006 £20m).
The following table sets forth awards and options granted during 2007. No awards were granted under the Executive Share Option Plan,
Sharesave Plan or US Employee Stock Purchase Plan during the year.
Short Term Deferred Long Term
Incentive Plan Incentive Plan
Number of shares awarded in 2007 675,515 3,538,535
In 2007 and 2006, the Group used separate option pricing models and assumptions for each plan. The following tables set forth
information about how the fair value of each option grant is calculated:
Short Term Deferred Long Term
Incentive Plan Incentive Plan
2007
Valuation model Binomial Monte Carlo
Simulation and
Binomial
Weighted average share price 1252.0p 1262.0p
Expected dividend yield 2.13% 2.13%
Risk-free interest rate 5.40%
Volatility* 19%
Term (years) 3.0 3.0
Short Term Deferred Long Term
Incentive Plan Incentive Plan
2006
Valuation model Binomial Monte Carlo
Simulation and
Binomial
Weighted average share price 831.0p 946.0p
Expected dividend yield 2.32%
Risk-free interest rate 4.90%
Volatility* 20%
Term (years) 2.0 3.0
* The expected volatility was determined by calculating the historical volatility of the Company’s share price corresponding to the expected life of the option
or share award.
Notes to the Group financial statements continued