Mercedes 1998 Annual Report Download - page 98

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Expected dividend yield 2.45 % 0.83 %
Expected volatility 35.2 % 26.2 %
Risk-free interest rate 4.09 % 3.65 %
Expected lives (in years) 22
Fair value per option € 19.38 € 11.76
Expected dividend yield 4.0 % 4.7 % 4.8 %
Expected volatility 29 % 26 % 31 %
Risk-free interest rate 5.7 % 6.2 % 6.7 %
Expected lives (in years) 555
Fair value per option $9.20 $6.79 $6.87
basic and diluted earnings per share would have been reduced
by approximately € 127 and € 25 (basic earnings per share:
€ 0.13 and € 0.03; diluted earnings per share: € 0.13 and
€ 0.03) in 1998 and 1997, respectively. The pro forma effect on
the Group’s consolidated net income and basic and diluted
earnings per share for 1996 was not material.
The fair value of the variable stock options was calculated at
the grant date based on a trinomial tree option pricing model
which considers the terms of the issuance. The underlying
assumptions and the resulting fair value per option are as
follows (at grant date):
1998 1997
The fair value of each Chrysler fixed stock option grant is
estimated on the date of grant using the Black-Scholes option-
pricing model with the following weighted-average
assumptions used for grants and resulting fair values in 1998,
1997 and 1996:
1998 1997 1996
Since Chrysler’s fixed stock option grants did not vest, except
upon retirement or a change in corporate control,
compensation expense was recognized over the expected life
of the option (i.e., five years).
The fair value of each Performance Share award was estimated
at the date of grant based on the market value of a share of
Chrysler common stock on the date of grant. Performance
Share awards were recognized over performance cycles of two
to three years. However, because all outstanding fixed stock
option and Performance Share grants were vested as of the
date of the Merger, for purposes of SFAS 123, all remaining
compensation expense was recognized in 1998.
22. ACCRUED LIABILITIES
Accrued liabilities are comprised of the following:
At December 31,
1998 1997
Due after Due after
Total one year Total one year
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
94
Pension plans and similar obligations (see Note 22a) 16,618 15,714 17,821 16,963
Income and other taxes 1,122 246 1,006 302
Other accrued liabilities (see Note 22b) 16,889 6,464 16,960 7,076
34,629 22,424 35,787 24,341