NICK WINGFIELD Apple Inc on Monday announced that it would pay a quarterly stock dividend of $2.65 a share beginning in the quarter that starts in July and its board authorised a $10 billion share buyback,two moves that will use up some of its cash hoard of nearly $100 billion to reward investors. The company issued an unusual media alert on Sunday evening saying that it planned to announce the long-awaited decision by its board about what to do with its cash balance. Apple stock,which has been on a steep trajectory,rose about 1 per cent to $591.04 a share in before-market activity on Monday after a temporary halt in trading. The company said it would use up to $45 billion of its domestic cash on the stock buyback and dividend programme. The three-year stock buyback would begin in September 2013. The company said it would spend about $10 billion on the dividend per year. The company,which recently released the newest version of its iPad,was widely expected to announce a dividend. As its cash has piled up,Wall Street analysts and investors had begun to call more loudly for Apple to return some of it to shareholders. Although having too much cash is rarely seen as a burden for a company,Apple earns less than 1 per cent in interest on the cash,which many investors view as wasteful. Until recently,Apple had resisted pressure to issue a dividend,a practice often associated with mature companies that have settled into slower rates of sales and earnings growth. While it is more than three and a half decades old,Apple has been on a growth spurt that is highly unusual for a company of its age. The success of new products like the iPhone and iPad has propelled both revenue and profits; during the holiday quarter,for example,the company more than doubled its profit from the same period in the prior year. Apple issued shareholder dividends earlier in its history,stopping in December 1995. Since Apples current chief executive,Timothy D Cook,took over last fall,he and other executives have signaled their willingness to consider a plan for the companys cash other than letting it accumulate. For months,Apple executives have said they were in discussions with the companys board members about developing such a plan.
