Holiday Inn 2008 Annual Report Download - page 90

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88 IHG Annual Report and Financial Statements 2008
25 Share-based payments continued
The Group recognised a cost of $47m (2007 $60m) in operating profit and $2m (2007 $nil) within exceptional administrative expenses
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 $2m (2007 $32m).
The following table sets forth awards and options granted during 2008. No awards were granted under the Executive Share Option Plan,
Sharesave Plan or US Employee Stock Purchase Plan during the year.
Annual Bonus Long Term
Plan Incentive Plan
Number of shares awarded in 2008 661,657 5,060,509
In 2008 and 2007, 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:
Annual Bonus Long Term
Plan Incentive Plan
2008
Valuation model Binomial Monte Carlo
Simulation and
Binomial
Weighted average share price 836.0p 865.0p
Expected dividend yield 3.33% 2.76%
Risk-free interest rate 4.78%
Volatility* 30%
Term (years) 3.0 3.0
Annual Bonus Long Term
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
* The expected volatility was determined by calculating the historical volatility of the Company’s share price corresponding to the expected life of the share award.
Notes to the Group financial statements continued