2013 | 2012 | 2011 | |||||||||
Fair value of options at grant date | $ | 3.73 | $ | 3.80 | $ | 4.64 | |||||
Dividend yield1 | 2.8 | % | 2.7 | % | 2.7 | % | |||||
Expected volatility2 | 17.0 | % | 18.0 | % | 19.0 | % | |||||
Risk-free interest rate3 | 0.9 | % | 1.0 | % | 2.3 | % | |||||
Expected term of the option4 | 5 years | 5 years | 5 years | ||||||||
1 | The dividend yield is the calculated yield on the Company's stock at the time of the grant. |
2 | Expected volatility is based on implied volatilities from traded options on the Company's stock, historical volatility of the Company's stock and other factors. |
3 | 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. |
4 | The expected term of the option represents the period of time that options granted are expected to be outstanding and is derived by analyzing historical exercise behavior. |