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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
Weighted-average assumptions used to estimate the fair value of employee stock options were as follows:
Years Ended March 31,
2016 2015 2014
Expected stock price volatility 21% 22% 22%
Expected dividend yield 0.4% 0.6% 0.7%
Risk-free interest rate 1.4% 1.3% 0.7%
Expected life (in years) 4 4 4
The following is a summary of stock options outstanding at March 31, 2016:
Options Outstanding Options Exercisable
Range of Exercise
Prices
Number of Options
Outstanding
at Year End
(In millions)
Weighted-Average
Remaining
Contractual
Life (Years)
Weighted-
Average
Exercise Price
Number of Options
Exercisable at
Year End
(In millions)
Weighted-
Average
Exercise Price
$40.46 – $140.19 3 2 $ 83.62 2 $ 78.01
140.20 – 239.93 1 6 206.58 — 180.24
42
The following table summarizes stock option activity during 2016:
(In millions, except per share data) Shares
Weighted-
Average
Exercise
Price
Weighted-Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value (2)
Outstanding, March 31, 2015 5 $ 95.01 4 $539
Granted 1 236.77
Cancelled (1) 149.19
Exercised (1) 63.75
Outstanding, March 31, 2016 4 $118.95 3 $201
Vested and expected to vest (1) 3 $118.21 3 $200
Vested and exercisable, March 31, 2016 2 85.15 2 173
(1) The number of options expected to vest takes into account an estimate of expected forfeitures.
(2) The intrinsic value is calculated as the difference between the period-end market price of the Company’s
common stock and the exercise price of “in-the-money” options.
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