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Stock-Based Compensation (Tables)
 6 Months Ended
Jun. 30, 2019
Share-based Payment Arrangement [Abstract]  
Schedule of Stock-based compensation expense
Stock-based compensation expense was as follows:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2019
 
2018
 
2019
 
2018
Stock-based compensation expense, pre-tax
 
$
15

 
$
13

 
$
30

 
$
29

Income tax benefit recognized in earnings
 
3

 
3

 
7

 
7
Schedule of key valuation input assumptions
A summary of the key valuation input assumptions used in the Monte Carlo simulation relative to PS awards granted were as follows:
 
 
Program to Date June 30, 2019
Term
 
3 years

Risk-free interest rate(1)
 
2.51
%
Dividend yield(2)
 
3.97
%
Xerox’s blended volatility(3)
 
32.95
%
Weighted average fair value(4)
 
$
16.16

____________
(1)
The risk-free interest rate was based on the zero-coupon U.S. Treasury yield curve on the valuation date, with a maturity matched to the performance period.
(2)
The dividend yield was calculated as the expected quarterly dividend divided by Xerox’s three-month average stock price as of the valuation date, annualized and continuously compounded.
(3)
Xerox’s volatility is calculated using a blended volatility approach, with 50% weight on Xerox's historical volatility calculated from daily stock returns over a three-year look-back term from the valuation date, and 50% weight on Xerox's implied volatility.
(4)
The weighted average of fair values used to record compensation expense as determined by the Monte Carlo simulation.
Schedule of absolute TSR payout as a percentage
The Absolute Share Price is compared against total return targets to determine the payout as follows:
Total Return Targets(1)
 
Payout Percentages
$40.00 and above
 
200
%
$35.00
 
100
%
$30.00
 
50
%
Below $30.00
 
0
%
____________
(1)
For performance between the levels described above, the degree of vesting is interpolated on a linear basis.