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Burcolene 12/07

Uuams7y ago
Dear Sir I don't understand how Number of Option is calculated. Number of option = 25.4million *(1-0.05)^3 *(1-0.2)=17.42 million.
John MoffatJohn MoffatTutor7y ago#1
There is an attrition rate of 5% a year - so the number will reduce by 5% a year for 3 years. Hence the (1 - 0.05)^3 The question also says that 20% will not have achieved the required performance, so only 80% will - hence the (1 - 0.2)
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