Telstra 2009 Annual Report Download - page 223

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Telstra Corporation Limited and controlled entities
208
Notes to the Financial Statements (continued)
Telstra Growthshare Trust (continued)
(b) Long term incentive (LTI) plans (continued)
(v) Fair value of equity instruments granted
The fair value of LTI instruments granted during the financial year was
calculated using a valuation technique that is consistent with the
Black-Scholes methodology and utilises Monte Carlo simulations.
The following weighted average assumptions were used in
determining the valuation:
(*) The date the instruments become exercisable.
For the LTI options (former CEO), the fair value has been measured at
a grant date of 21 August 2008 and has been allocated over the period
for which the service is received which commenced 1 July 2008 for the
tranche 3 allocation.
For the ESOP options, the fair value has been measured at a grant date
of 22 January 2009 and has been allocated over the period for which
the service is received which commenced on 1 July 2008.
For the US ESOP options, the fair value has been measured at a grant
date of 21 August 2008 and has been allocated over the period for
which the service is received which commenced on grant date.
For the LTI options (in relation to executives other than the former
CEO), the fair value has been measured at a grant date of 8 May 2009
and has been allocated over the period for which the service is
received which commenced 1 July 2008.
For the LTI restricted shares (in relation to executives other than the
former CEO), the fair value has been measured at a grant date of 8 May
2009 and has been allocated over the period for which the service is
received which commenced 1 July 2008.
The expected stock volatility is a measure of the amount by which the
price is expected to fluctuate during a period. This was based on
historical daily and weekly closing share prices.
27. Employee share plans (continued)
Growthshare
LTI options
(former CEO)
Growthshare
ESOP options
US ESOP
options
Growthshare
LTI options
Growthshare
LTI restricted
shares
Growthshare
LTI options
(former CEO)
Growthshare
ESOP options
Growthshare
LTI options
Aug 2008 Jan 2009 Aug 08 May 09 May 09 Aug 2007 Dec 2007 March 2008
Share price. . . . . . . . . . . . $4.39 $3.58 $4.39 $3.23 $3.23 $4.24 $4.65 $4.37
Risk free rate . . . . . . . . . . 5.65% 3.39% 5.67% 4.21% 4.21% 6.14% / 6.08% 6.48% 6.20%
Dividend yield . . . . . . . . . 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0%
Expected stock volatility . . . 21% 23% 21% 23% 23% 19% 19% 20%
Expected life. . . . . . . . . . . (*) (*) (*) (*) (*)(*)(*)(*)
Expected rate of
achievement of TSR
performance hurdles . . . . . 17% n/a n/a 52% n/a 28% n/a 32%