Table of Contents Notes to Consolidated Financial Statements — (Continued) Becton, Dickinson and Company The fair value of share-based payments is recognized as compensation expense in net income. The amounts and location of compensation cost relating to share-based payments included in the consolidated statements of income is as follows: Upon the Company's acquisition of Bard in 2018, certain pre-acquisition equity awards of Bard were converted into either BD SARs or BD restricted stock awards, as applicable. These awards have substantially the same terms and conditions as the converted Bard awards immediately prior to the acquisition date. Compensation expense of $16 million, $40 million and $126 million associated with these replacement awards was recorded in  Acquisitions and other restructurings  in 2020, 2019 and 2018, respectively. (Millions of dollars) 2020 2019 2018 Cost of products sold $ 40  $ 37  $ 36  Selling and administrative expense 150  145  136  Research and development expense 34  32  29  Acquisitions and other restructurings 20  50  130  $ 245  $ 265  $ 332  Tax benefit associated with share-based compensation costs recognized $ 57  $ 62  $ 79  SARs represent the right to receive, upon exercise, shares of common stock having a value equal to the difference between the market price of common stock on the date of exercise and the exercise price on the date of grant. SARs vest over a period of four years and have a term of ten years. The fair value was estimated on the date of grant using a lattice-based binomial option valuation model that uses the following weighted- average assumptions: Stock Appreciation Rights Expected volatility is based upon historical volatility for the Company’s common stock and other factors. The expected life of SARs granted is derived from the output of the lattice-based model, using assumed exercise rates based on historical exercise and termination patterns, and represents the period of time that SARs granted are expected to be outstanding. The risk-free interest rate used is based upon the published U.S. Treasury yield curve in effect at the time of grant for instruments with a similar life. The dividend yield is based upon the most recently declared quarterly dividend as of the grant date. The Company issued 0.8 million shares during 2020 to satisfy the SARs exercised. 2020 2019 2018 Risk-free interest rate 1.69% 3.05% 2.32% Expected volatility 19.0% 18.0% 19.0% Expected dividend yield 1.24% 1.27% 1.33% Expected life 7.4 years 7.2 years 7.4 years Fair value derived $48.82 $51.86 $46.10 75