Apple Announces Plans To Pay Dividend To Shareholders
March 19, 2012

Apple Announces Plans To Pay Dividends To Shareholders

Apple said during a conference call on Monday that it would start paying some dividends back to its shareholders.

The world's most valuable company has been sitting on $97.6 billion in cash and securities, and analysts have been wondering how Apple planned on spending the stockpile.

Former CEO Steve Jobs resisted calls to reward shareholders with some of that money, and he used to say that the money was better used to give Apple maneuvering room.

However, the new CEO Tim Cook said on Monday that with this much cash on hand, a divined wouldn't restrain the company's options.

Apple said it will pay a quarterly dividend of $2.65 per share, starting in its fiscal fourth quarter, which begins July 1.

The dividend works out to $10.60 annually, or 1.8 percent of the current stock price.  Microsoft pays 2.5 percent of its stock price it dividends, and Hewlett-Packard Co pays 2 percent.

Despite the percentage being smaller than other large technology companies, Apple will pay one of the richest dividends in the U.S., spending over $10 billion on dividend in its first year.

Apple generated $31 billion in cash in the fiscal year that ended in September, and is on pace to generate even more in the current year.

“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,” Tim Cook, Apple´s CEO, said in a press release.

“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.”

The decision comes after the company's new iPad debuted in stores this weekend.

AT&T announced on Monday that it set a new single-day record for its iPad sales and activations.

Also, Apple said during the conference call that it had a "record weekend' with iPad sales and was "thrilled with it."

The initial iPad sold 300,000 units in the first day, and sold 1 million units in 28 days.  Apple never released the iPad 2 initial sales numbers.