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Share-based payments
 6 Months Ended
Jun. 30, 2018
Share-based Payment Arrangements [Abstract]  
Share-based payments
 
Note 13 Share-based payments
The following share-based payment amounts are included in the income statements as operating costs.
 
THREE MONTHS
SIX MONTHS
FOR THE PERIOD ENDED JUNE 30
2018

2017

2018

2017

Employee savings plan (ESP)
(7
)
(7
)
(14
)
(14
)
Restricted share units (RSUs) and performance share units (PSUs)
(11
)
(10
)
(30
)
(27
)
Other (1)
(2
)
(2
)
(6
)
(5
)
Total share-based payments
(20
)
(19
)
(50
)
(46
)

(1) Includes deferred share plan (DSP), deferred share units (DSUs) and stock options.
The following tables summarize the change in outstanding ESP shares, RSUs/PSUs, DSUs and stock options for the period ended June 30, 2018.
ESP
 
NUMBER OF ESP SHARES

Unvested contributions, January 1, 2018
1,039,030

Contributions(1)
331,987

Dividends credited
26,960

Vested
(255,867
)
Forfeited
(71,395
)
Unvested contributions, June 30, 2018
1,070,715

(1)
The weighted average fair value of the shares contributed during the six months ended June 30, 2018 was $56.

RSUs/PSUs
 
NUMBER OF RSUs/PSUs

Outstanding, January 1, 2018
2,740,392

Granted(1)
958,411

Dividends credited
71,863

Settled
(1,010,626
)
Forfeited
(20,287
)
Outstanding, June 30, 2018
2,739,753

(1)
The weighted average fair value of the RSUs/PSUs granted during the six months ended June 30, 2018 was $57.

DSUs
 
NUMBER OF DSUs

Outstanding, January 1, 2018
4,309,528

Issued(1)
69,659

Settlement of RSUs/PSUs
112,675

Dividends credited
116,172

Settled
(181,645
)
Outstanding, June 30, 2018
4,426,389

(1)
The weighted average fair value of the DSUs issued during the six months ended June 30, 2018 was $55.

STOCK OPTIONS
 
 
NUMBER OF OPTIONS

WEIGHTED AVERAGE EXERCISE PRICE ($)

Outstanding, January 1, 2018
 
10,490,249

55

Granted
 
3,651,802

57

Exercised(1)
 
(59,756
)
39

Forfeited
 
(4,641
)
59

Outstanding, June 30, 2018
 
14,077,654

56

Exercisable, June 30, 2018
 
4,606,773

52

(1)
The weighted average share price for options exercised during the six months ended June 30, 2018 was $56.
ASSUMPTIONS USED IN STOCK OPTION PRICING MODEL
The fair value of options granted was determined using a variation of a binomial option pricing model that takes into account factors specific to the share incentive plans, such as the vesting period. The following table shows the principal assumptions used in the valuation.
 
2018

Weighted average fair value per option granted
$2.13
Weighted average share price
$57
Weighted average exercise price
$57
Dividend yield
5
%
Expected volatility
12
%
Risk-free interest rate
2
%
Expected life (years)
4


Expected volatilities are based on the historical volatility of BCE’s share price. The risk-free rate used is equal to the yield available on Government of Canada bonds at the date of grant with a term equal to the expected life of the options.