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Apple richer than the US government sits pretty
When Apple recently announced a 45-billion dollar share repurchase and dividend payout plan from its 97 billion dollar reserve, the mind boggled at the picture of financial health of this technology giant.

ONCE TOUTED as a company that was richer than the US government, Apple has finally decided to go on a splurge. Out of its 97 billion dollar reserve, Apple has decided to use 45 billion dollars to pay out dividend to its share holders and also buy back shares over a period of three years.

It plans to invest 10 billion dollars in share repurchasing program which begins on September 30, 2012 for Apple fiscal 2013. The aim of the share repurchase program is to dilute the impact of future employee stock options and equity grants.

A quarterly dividend of $2.65 per share will be given in the fourth quarter of 2012 which begins July 1, 2012. This dividend will mostly be beneficial to long time investors in Apple’s shares. Apple’s share price is currently around $600. The last dividend offered by Apple was in 1995.

A part of the 45 billion dollar investment will also be used to settle vesting Restricted Stock Units.

“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,” said Tim Cook, Apple’s CEO, reported The Khaleej Times.

 “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.” he said, as reported on Apple's website.

Apple will mostly be using its domestic cash pile for this investment rather than the larger cash stock it holds abroad since bringing back this cash stock back to the United States will invite heavy taxation.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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