Telstra 2010 Annual Report Download - page 198

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Telstra Corporation Limited and controlled entities
183
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 FCF ROI and RTSR restricted shares, the fair value has
been measured at a grant date of 22 February 2010 and has been
allocated over the period for which the service is received which
commenced 1 July 2009.
For the ESRP performance rights, the fair value has been measured
at a grant date of 8 December 2009 and has been allocated over
the period for which the service is received which commenced on 1
July 2009.
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 FCF ROI
restricted
shares
Growthshare
LTI RTSR
restricted
shares
Growthshare
ESRP
performance
rights
Growthshare
LTI options
(former CEO)
Growthshare
ESOP options
US ESOP
options
Growthshare
LTI options
Growthshare
LTI restricted
shares
Feb 2010 Feb 2010 Dec 2009 Aug 2008 Jan 2009 Aug 2008 May 2009 May 2009
Share price . . . . . . $3.01 $3.01 $3.42 $4.39 $3.58 $4.39 $3.23 $3.23
Risk free rate . . . . . 4.75% 4.75% 4.95% 5.65% 3.39% 5.67% 4.21% 4.21%
Dividend yield . . . . . 6.5% 6.5% 6.5% 6.0% 6.0% 6.0% 6.0% 6.0%
Expected stock volatility 26% 26% 26% 21% 23% 21% 23% 23%
Expected life . . . . . . (*) (*) (*) (*) (*) (*) (*) (*)
Expected rate of
achievement of TSR
performance hurdles . . n/a 33.2% n/a 17% n/a n/a 52% n/a