Apple to Spend $45 Billion on Dividend and Share Buyback

Just ahead of its call, the Cupertino-based technology giant announced it plans to set off a quarterly dividend of $2.65 per share at some point in the fourth quarter of its fiscal 2012, starting July 1st, 2012. The company undoubtedly has a massive on hand cash with it and wants to make full use of it.

In addition, the technology giant also has plans to start a $10 billion share repurchasing program, expected to start in company’s fiscal 2013 that will begin on September 30, 2012.

This implies that that the Cupertino-based tech giant is up to spend almost $45 billion of its cash reserves on dividends and share repurchase within in the first three years after these programs will go live.

Tim Cook, CEO of Apple said in one of 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.”

Cook further added, “Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program.”

Unsurprisingly, the company has a very healthy cash flow. And with these new programs, the company’s treasure chest might be able to increase considerably in the next three years to pass its existing reserves of $97 billion. The company has already felt that it has enough cash in hand for potential acquisitions and for all other expenditures. The company realizes the fact that it still has enough reserves to buy back some shares and pay out a dividend. This will certainly please the shareholders.

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