It is the first time the world’s highest-valued publicly traded firm has declared a dividend since 1995.
Investors had been anticipating Monday’s announcement, with Apple stock up 37 percent since January when the company hinted a dividend program was being developed, and rising about 2 percent to $596.47 a share in early trading, The New York Times reported.
At the end of last year Apple revealed it had nearly $98 billion in cash. The company says it will use up to $45 billion of that on the stock buyback and dividend program, and will begin buying back up to $10 billion of its own shares from September 30, 2012 onwards, the beginning of Apple’s next financial year, the BBC reports.
Investors will receive a quarterly dividend of $2.65 a share starting the period beginning July 1, according to Bloomberg.
Huge sales of iPhones and iPads have swelled Apple’s cash pile. In a statement, Apple CEO Tim Cook said: “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 preparations and capital expenditures in our supply chain, and building out our infrastructure.”
“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.”
Former CEO Steve Jobs, who died of cancer in October, had long resisted calls from investors to reward shareholders with money from the firm’s cash pile, arguing that the money was better used to give Apple manoeuvring room, such as the ability to buy out other companies, according to the Associated Press.
Cook, who succeeded Jobs, fuelled speculation that an announcement was imminent when he said this year that Apple had “more than we need to run a company,” and indicated that the firm’s board was considering its options.