Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Share-based Payment Arrangement [Abstract]

Weighted-Average Fair Value Assumptions

The weighted-average fair value assumptions were approximately:

	For the nine months ended September 30, 2019
Grant price	$272.66
Expected option life (years)(1)	5.00
Risk-free interest rate(2)	2.22%
Expected stock price volatility(3)	25.04%
Expected annual dividends per share(4)	$2.6191
Expected forfeiture rate(5)	6.05%
Weighted-average grant date fair value per option granted during the period	$63.69

⁽¹⁾  Represents the period of time that awards are expected to be outstanding. Historical data on exercise behaviour or, when available, specific expectations regarding future exercise behaviour were used to estimate the expected life of the option.

⁽²⁾  Based on the implied yield available on zero-coupon government issues with an equivalent term commensurate with the expected term of the option.

⁽³⁾  Based on the historical volatility of the Company’s stock price over a period commensurate with the expected term of the option.

⁽⁴⁾  Determined by the current annual dividend at the time of grant. The Company does not employ different dividend yields throughout the contractual term of the option. On May 6, 2019, the Company announced an increase in its quarterly dividend to $0.8300 per share, representing $3.3200 on an annual basis.

⁽⁵⁾ 

The Company estimates forfeitures based on past experience. This rate is monitored on a periodic basis.