Apple is finally releasing its funds to further reward its Shareholders via the introduction of one of the richest quarterly dividends plus instituting the stock buyback.
For years the world’s most prized company, which is currently sitting on $97.6 billion in cash and securities, had resisted to reward its shareholders, mainly for the reason that, Chief Executive Officer Steve Jobs was of the view that the same funds should be used otherwise.
Tim Cook, Apple’s Chief Executive explained in his statement, “We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You’ll see more of all of these in the future.”
“Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business,” and that “these decisions will not close any doors for us”, he added.
With the anticipated sales of iPhones and iPads, Apple is all set to generate a lot more funds in the form of cash in the current fiscal year, as compared to last year in which it pooled up $31 billion.
The quarterly dividend is expected to come out in July in Apple’s fourth fiscal quarter. The dividend works out to an annualized amount of $10.60 which will be approximately 1.8 percent of the current share price. Moreover, the share repurchase will take place over the next three years starting from September, and thus restricting the effect of share dilution from the Employee Share option schemes.
The news came out only after a period of 3 days of the launch of Apple’s New iPad. The share buyback program embracing $10 billion ($45 billion in three years) is believed to turn out as an attractive option for the remaining investors as it will raise their share in the company.