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Stock Incentive Plans (Tables) | 12 Months Ended
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Dec. 31, 2019
Share-based Payment Arrangement [Abstract] |
Stock-based compensation | The following table is a summary of stock-based compensation for the years ended December 31, 2019, 2018 and 2017:
In millions | 2019 |  | 2018 |  | 2017
Stock options and stock appreciation rights (“SARs”) (1) (2) | $ | 76 |  |  | $ | 70 |  |  | $ | 65 |
Restricted stock units and performance stock units (2) | 377 |  |  | 210 |  |  | 169 |
Total stock-based compensation | $ | 453 |  |  | $ | 280 |  |  | $ | 234 |
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(1) | Includes the ESPP.
(2) Stock-based compensation for the year ended December 31, 2018 includes $14 million and $27 million associated with accelerated vesting of SARs and restricted stock replacement awards, respectively, issued to Aetna employees who were terminated subsequent to the Aetna Acquisition.
Schedule ESPP valuation assumptions | The following table is a summary of the assumptions used to value the ESPP awards for the years ended December 31, 2019, 2018 and 2017:
| 2019 |  | 2018 |  | 2017
Dividend yield (1) | 1.70 | % |  | 1.45 | % |  | 1.24 | %
Expected volatility (2) | 27.96 | % |  | 28.02 | % |  | 22.70 | %
Risk-free interest rate (3) | 2.27 | % |  | 1.87 | % |  | 0.86 | %
Expected life (in years) (4) | 0.5 |  |  | 0.5 |  |  | 0.5 |
Weighted-average grant date fair value | $ | 10.51 |  |  | $ | 12.26 |  |  | $ | 13.01 |
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(1) | The dividend yield is calculated based on semi-annual dividends paid and the fair market value of CVS Health stock at the grant date.
(2) | The expected volatility is estimated based on the historical volatility of CVS Health’s daily stock price over the previous six month period.
(3) | The risk-free interest rate is selected based on the Treasury constant maturity interest rate whose term is consistent with the expected term of ESPP purchases (i.e., six months).
(4) The expected life is based on the semi-annual purchase period.
RSU and performance share unit activity | The following table is a summary of the restricted stock unit and performance stock unit activity for the year ended December 31, 2019:
In thousands, except weighted average grant date fair value | Units |  | Weighted Average Grant Date Fair Value
Outstanding at beginning of year, nonvested | 11,005 |  |  | $ | 76.18 |
Granted | 7,644 |  |  | $ | 54.34 |
Vested | (4,216 | ) |  | $ | 62.59 |
Forfeited | (1,308 | ) |  | $ | 58.73 |
Outstanding at end of year, nonvested | 13,125 |  |  | $ | 61.57 |
Cash proceeds received and tax benefit from share-based payment awards | The following table is a summary of stock option and SAR activity that occurred for the years ended December 31, 2019, 2018 and 2017:
In millions | 2019 |  | 2018 |  | 2017
Cash received from stock options exercised (including ESPP) | $ | 210 |  |  | $ | 242 |  |  | $ | 329 |
Payments for taxes for net share settlement of equity awards | 112 |  |  | 97 |  |  | 71 |
Intrinsic value of stock options and SARs exercised | 30 |  |  | 79 |  |  | 176 |
Fair value of stock options and SARs vested | 467 |  |  | 324 |  |  | 341 |
Schedule of valuation assumptions | The fair value of each stock option and SAR is estimated using the Black-Scholes option pricing model based on the following assumptions at the time of grant:
| 2019 |  | 2018 |  | 2017
Dividend yield (1) | 3.68 | % |  | 2.76 | % |  | 2.56 | %
Expected volatility (2) | 21.76 | % |  | 21.27 | % |  | 18.39 | %
Risk-free interest rate (3) | 0.56 | % |  | 2.77 | % |  | 1.77 | %
Expected life (in years) (4) | 6.3 |  |  | 4.8 |  |  | 4.1 |
Weighted-average grant date fair value | $ | 6.27 |  |  | $ | 24.55 |  |  | $ | 9.43 |
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(1) | The dividend yield is based on annual dividends paid and the fair market value of CVS Health stock at the grant date.
(2) | The expected volatility is estimated based on the historical volatility of CVS Health’s daily stock price over a period equal to the expected life of each option or SAR grant after adjustments for infrequent events such as stock splits.
(3) | The risk-free interest rate is selected based on yields from U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the options or SARs being valued.
(4) The expected life represents the number of years the options or SARs are expected to be outstanding from grant date based on historical option or SAR holder exercise experience.
Schedule of stock options and stock appreciation rights award activity | The following table is a summary of the Company’s stock option and SAR activity for the year ended December 31, 2019:
In thousands, except weighted average exercise price and remaining contractual term | Shares |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term |  | Aggregate Intrinsic Value
Outstanding at beginning of year | 22,909 |  |  | $ | 71.15 |  |  |  |  |
Granted | 6,538 |  |  | $ | 54.40 |  |  |  |  |
Exercised | (3,667 | ) |  | $ | 46.17 |  |  |  |  |
Forfeited | (769 | ) |  | $ | 68.12 |  |  |  |  |
Expired | (1,109 | ) |  | $ | 82.40 |  |  |  |  |
Outstanding at end of year | 23,902 |  |  | $ | 69.98 |  |  | 4.76 |  | $ | 274,987 |
Exercisable at end of year | 13,267 |  |  | $ | 77.48 |  |  | 2.73 |  | 109,765 |
Vested at end of year and expected to vest in the future | 23,328 |  |  | $ | 70.28 |  |  | 4.67 |  | 265,128 |

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