Apple to buy back shares and pay dividend

Published:  20 Mar at 6 PM

As reported by the BBC, Apple has announced its plans to start paying shareholders a dividend to buy back many of its shares. The tech giant stated that it would offer a quarterly dividend to investors of $2.65 per share.

The firm will purchase up to $10 billion (£6.3 billion) of its own shares during the next financial year, starting on 30 September 2012. At the end of 2011, Apple announced it had $97.6 billion in cash. It expects to spend $45 billion during the next three years.

This is the first time since 1995 that the firm is declaring a dividend. The company has used its cash on business investments including acquisitions, new retail store openings, increased research and development, strategic prepayments and capital expenditures, and building out its infrastructure, said Apple CEO Tim Cook.

Even with these investments, Apple can maintain enough cash for strategic opportunities and still have plenty of funding to run its business, which is why it is initiating its dividend and share repurchase programme, said Cook.

Company shares have recently soared to about $600, making the firm the globe’s most valuable company, wielding a stock market value of over $500 billion. In 2002, the shares stood at about $10.
Booming iPhone and iPad sales have been helping the firm develop its huge cash pile.