Apple's US$98 Billion Decision
Apple has announced that a conference call will be held early this week to discuss what it plans to do with its US$98 billion cash reserve. That's a few short days after its stock reached US$600 per share largely thanks to strong demand for the company's impressive new iPad.
So far, the loudest calls are from investors who want Apple to return some of that money to their shareholders. According to Reuters, Apple CEO Tim Cook has seriously considered those calls:
Cook recently said he had been "thinking very deeply" about investors' demands that Apple return some of the cash to shareholders via a dividend. "Frankly speaking, it's more than we need to run the company," Cook said at the annual shareholders meeting in February.
And because US$98 billion is too much money for a company to spend, Apple has decided to begin dividend payouts -- a move that hasn't been made since as far back as 1995.
The world's most valuable company will start paying its first dividends since 1995 - a regular quarterly payout of $2.65 a share - in July, and buy back up to $10 billion of its stock beginning in the next fiscal year.
The $10 billion annual dividend program, which Cook said will be reviewed periodically, ranks among the largest current U.S. corporate cash payouts.
According to Reuters, this buy back program is expected to run for three years, and its "primary objective is to offset the impact of employee stock options and equity grants."