Incredimail 2011 Annual Report Download - page 107

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PERION NETWORK LTD. AND ITS SUBSIDIARIES
(Formerly: Incredimail Ltd.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
NOTE 3:
-
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
In November 2010 the Company's Board decided to change its dividend policy so that beginning with earnings of 2011 and beyond, the
Company does not intend to distribute any dividends to the holders of its Ordinary shares, as result the Company has no foreseeable plans to
pay dividends.
The fair value of the Company's stock options granted to employees and directors was estimated using the following weighted average
assumptions:
Year ended December 31,
2009
2010
2011
Risk free interest rate
2.73
%
1.62
%
2.23
%
Dividend yield
0%
-
13.82
%
0%
-
7.83
%
0
%
Weighted average
dividend
yield
13.01
%
5.65
%
0
%
Expected volatility
55.41%-
74.67
%
62.77%-
64.56
%
47.31%-
65.27
%
Weighted average volatility
65.04
%
63.67
%
56.29
%
Expected term (years)
3.915
4.6
3.75
r.
Derivative instruments:
The Company uses derivative instruments to protect against foreign currency fluctuations. These instruments were not designated as cash flow
hedge as defined by ASC 815, "Derivative and Hedging" and, therefore, the Company recognized the changes in fair value of these instruments
in the statement of income as financial income or expense, as incurred.
s.
Fair value of financial instruments:
The carrying amounts of financial instruments carried at cost, including cash and cash equivalents, trade receivables, other receivables, trade
payables and other liabilities approximate their fair value due to the short
-
term maturities of such instruments.
The Company follows the provisions of ASC 820, "Fair Value Measurements and Disclosures". Under this standard, fair value is defined as the
price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market
participants at the measurement date.
F
-
20