TD Ameritrade 2018 Annual Report

TD AMERITRADE HOLDING CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) 81 The following is a summary of option activity in the Company's stock incentive plans for the fiscal year ended September 30, 2018: Number of Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions) Outstanding at beginning and end of year. . . . . . 503 $ 27.97 7.3 $ 13 Exercisable at end of year . . . . . . . . . . . . . . . . . . 252 $ 27.97 7.3 $ 6 The weighted-average grant-date fair value of options granted during fiscal year 2016 was $6.16. No options were granted during fiscal years 2018 and 2017. The total intrinsic value of options exercised during fiscal years 2017 and 2016 was $26 million and $0.1 million, respectively. No options were exercised during fiscal year 2018. As of September 30, 2018, the total unrecognized compensation cost related to nonvested stock options awards was $1 million and was expected to be recognized over a weighted-average period of 1.3 years. The fair value of stock options granted during fiscal year 2016was estimated using aBlack-Scholes-Merton valuation model with the following inputs: Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.73% Expected dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4% Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27% Expected option life (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 The risk-free interest rate input was based on U.S. Treasury note yields with remaining terms comparable to the expected option life input used in the valuationmodel. The expected dividend yieldwas based on the annual dividend yield at the time of grant. The expected volatility was based on historical daily price changes of the Company's stock since July 2009. The expected option life was the average number of years that the Company estimated the options will be outstanding, based primarily on historical employee option exercise behavior. The Company measures the fair value of RSUs based upon the volume-weighted average market price of the underlying common stock as of the date of grant. The grant date fair value of PRSUs was determined based upon a Monte Carlo simulation model whereby the stock prices of the Company and the selected peer group companies were simulated using correlated Geometric Brownianmotion paths in order to estimate the Company's total expected shareholder return rank within the peer group index and the corresponding percent of PRSUs that are estimated to be earned per the PRSU award agreement. RSUs and PRSUs are amortized over their applicable vesting period using the straight-line method, reduced by expected forfeitures. The following is a summary of RSU activity in the Company's stock incentive plans for the fiscal year ended September 30, 2018: Number of Units (in thousands) Weighted Average Grant Date Fair Value Nonvested at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,394 $ 34.83 Granted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 671 $ 50.61 Vested. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (807) $ 33.24 Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (129) $ 41.72 Nonvested at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,129 $ 39.99 The weighted-average grant-date fair value of RSUs granted during fiscal years 2018, 2017 and 2016 was $50.61, $40.66 and $27.97, respectively. As of September 30, 2018, there was $31 million of estimated unrecognized