Annual Repor-Dell

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Unformatted text preview: d by the number of options exercised) that was received by the option holders who exercised their options during the fiscal year. At January 28, 2011, January 29, 2010, and January 30, 2009, there was $65 million, $28 million, and $1 million of total unrecognized stock-based compensation expense related to stock options expected to be recognized over a weighted-average period of 2.0 years, 2.2 years, and 2.3 years, respectively. Valuation of Stock Options Dell uses the Black-Scholes option pricing model to estimate the fair value of stock options at grant date. The estimated fair values incorporate various assumptions, including volatility, expected term, and risk-free interest rates. Expected volatility is based on a blend of implied and historical volatility of Dell's common stock over the most recent period commensurate with the estimated expected term of Dell's stock options. Dell uses this blend of implied and historical volatility, as well as other economic data, because management believes such volatility is more representative of prospective trends. The expected term of an award is based on historical experience and on the terms and conditions of the stock awards granted to employees. The dividend yield of zero is based on the fact that Dell has never paid cash dividends and has no present intention to pay cash dividends. The weighted-average fair value of stock options was determined based on the Black-Scholes option pricing model weighted for all grants utilizing the assumptions in the following table: Fiscal Year Ended January 29, 2010 4.5 1.8% 44% -% January 28, 2011 4.5 2.2% 37% -% Expected term (in years) Risk-free interest rate (U.S. Government Treasury Note) Volatility Dividends January 30, 2009 3.6 2.3% 37% -% Restricted Stock Awards Non-vested restricted stock awards and activities were as follows: Non-vested restricted stock: Beginning balance Granted Vested(a) Forfeited Non-vested restricted stock ending balance Fiscal 2011 WeightedNumber Average of Grant Date Shares Fair Value (in millions) (per share) 40 26 (17) (7) 42 $ $ 16.84 14.53 19.10 15.21 14.71 Fis...
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This document was uploaded on 02/22/2014 for the course ACCT 6330 at University of Texas at Dallas, Richardson.

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