Coca Cola 2006 Annual Report Download - page 103

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THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15: STOCK COMPENSATION PLANS (Continued)
analyzing historic exercise behavior. Expected volatilities are based on implied volatilities from traded options
on the Company’s stock, historical volatility of the Company’s stock, and other factors. The risk-free interest rate
for the period matching the expected term of the option is based on the U.S. Treasury yield curve in effect at the
time of the grant. The dividend yield is the calculated yield on the Company’s stock at the time of the grant.
The following table sets forth information about the weighted-average fair value of options granted during
the past three years and the weighted-average assumptions used for such grants:
2006 2005 2004
Fair value of options at grant date $ 8.16 $ 8.23 $ 8.84
Dividend yields 2.7% 2.6% 2.5%
Expected volatility 19.3% 19.9% 23.0%
Risk-free interest rates 4.5% 4.3% 3.8%
Expected term of the option 6 years 6 years 6 years
101