Apple Inc. has unveiled plans to pay a dividend and initiate a $10 billion stock buyback program as demand for the iPad and iPhone has boosted the company’s earnings, Bloomberg reports.
The dividend is reportedly the first in the company’s history.
The story reports: “Investors will receive a quarterly dividend of $2.65 a share starting in the period beginning July 1, Cupertino, California-based Apple said today in a statement. The buybacks will begin in the fiscal year starting Sept. 30 and will take place over three years, the company said.”
The company has $97.6 billion in cash and investments on hand, the story reports.
Bloomberg reports: “Investors had urged Apple to return some of the balance in the form a dividend. Chief Executive Officer Tim Cook fueled speculation an announcement might be coming when he said this year that Apple had ‘more than we need to run a company,’ and that the board was considering its options.”
The company expects to pay out $45 billion over three years, the report says.
In a statement, Chief Financial Officer Peter Oppenheimer said: “We are extremely confident in our future and see tremendous opportunities ahead.”
The story adds: “The dividend will cost Apple about $10 billion a year and represents a yield of 1.8 percent on the stock’s March 16 closing price. The company generated $16 billion in cash in the first quarter of fiscal 2012, which ended in December. Shaw Wu, an analyst at Sterne Agee & Leach Inc., predicts that Apple will generate about $75 billion in cash this year.”