Table:
| Years Ended December 31 |  |  |  |
| --- | --- | --- | --- |
| Black-Scholes Assumptions | 2019 | 2018 | 2017 |
| Dividend yield | 4.5% | 4.6% | 4.1% |
| Expected volatility | 28.3% | 28.7% | 27.1% |
| Risk-free interest rate | 2.5% | 2.5% | 2.0% |
| Expected life of the option term (in years) | 4.3 | 4.4 | 4.5 |
Paragraphs:
8. Stock option and award plan: (Continued)
The accounting for equity-based compensation expense requires the Company to make estimates and judgments that affect its financial statements. These estimates for stock options include the following.
Expected Dividend Yield—The Company uses an expected dividend yield based upon expected annual dividends and the Company’s stock price.
Expected Volatility—The Company uses its historical volatility for a period commensurate with the expected term of the option.
Risk-Free Interest Rate—The Company uses the zero coupon US Treasury rate during the quarter having a term that most closely resembles the expected term of the option.
Expected Term of the Option—The Company estimates the expected life of the option term by analyzing historical stock option exercises.
Forfeiture Rates—The Company estimates its forfeiture rate based on historical data with further consideration given to the class of employees to whom the options or shares were granted.
The weighted-average per share grant date fair value of options was $8.92 in 2019, $8.45 in 2018 and $7.06 in 2017. The following assumptions were used for determining the fair value of options granted in the three years ended December 31, 2019:
Question:
What is the average expected volatility in 2017 and 2018?
Answer: (27.1% + 28.7%)/2  = 27.9