Telstra 2012 Annual Report Download - page 214

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Telstra Corporation Limited and controlled entities
184
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 fiscal 2012 LTI FCF ROI and RTSR restricted shares, the fair
value has been measured at a grant date of 31 December 2011 and
has been allocated over the period for which the service is received
which commenced 1 July 2011.
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.
The fair value of fiscal 2012 ESP restricted share is $3.36 based on
the market value of Telstra shares at the allocation date of 19 April
2012 and has been allocated over the period for which the service
is received which commenced 1 July 2011.
27. Employee share plans (continued)
Growthshare
LTI FCF ROI
restricted
shares
Growthshare
LTI RTSR
restricted
shares
Growthshare
LTI FCF ROI
restricted shares
Growthshare
LTI RTSR
restricted shares
Growthshare
ESRP
performance
rights
Dec 2011 Dec 2011 Feb 2011 Feb 2011 Feb 2011
Share price . . . . . . . . . . . . . . . . . . . . $3.33 $3.33 $2.98 $2.98 $2.94
Risk free rate . . . . . . . . . . . . . . . . . . . 3.13% 3.13% 5.27% 5.27% 5.28%
Dividend yield . . . . . . . . . . . . . . . . . . 9.0% 9.0% 9.0% 9.0% 9.0%
Expected stock volatility . . . . . . . . . . . . . 22% 22% 25% 25% 25%
Expected life . . . . . . . . . . . . . . . . . . . (*) (*) (*) (*) (*)
Expected rate of achievement of TSR
performance hurdles . . . . . . . . . . . . . . . n/a 71% n/a 33% n/a