Apple Inc. (NASDAQ:AAPL) shareholders are soon to become the beneficiaries of one the most expensive capital return programs of all time. The Cupertino company will send out $3.05 for every share held to shareholders in the tech firm on Thursday. The total cost of the dividend clocks in at $2.867 billion.
Apple Inc. (AAPL) Capital Return Program Enhanced
The Apple Inc. (NASDAQ:AAPL) capital return program, which doubled its monetary size, was enhanced when the firm’s most recent earnings report was released. The program was formed of two parts, a huge dividend and a huge buyback. Today marks the first day of dividend payments under the new scheme to Apple Inc. (NASDAQ:AAPL) shareholders.
When Apple Inc. (NASDAQ:AAPL) started to pay a dividend in August of 2012, the company sent out $2.65 per share. Dividends are paid quarterly to the company’s shareholders. The new dividend will be paid to shareholders of record, meaning those that held their Apple Inc. (NASDAQ:AAPL) shares on or before May 9.
The entire Apple Inc. (NASDAQ:AAPL) capital program amounts to a spend of $100 billion, and Apple took on a large amount of debt to finance the move despite the huge amount of cash on the company books. Apple managed to sell $17 billion in bonds, taking advantage of a low interest rate, and a AAA rating, given it by the market’s confidence in its ability to pay the debt down when it comes due.
So far in 2013, Apple Inc. (NASDAQ:AAPL) shares have lost more than 18 percent of their value as investors worry that the company will be unable to grow at the rate it has in recent years. Increased competition in the smartphone market and declining gross margin were the major causes for the loss in the value of the company’s stock. On Thursday’s market, Apple Inc. (NASDAQ:AAPL) shares gained 1.32 percent to close the day at $434.53.
Apple Inc. (NASDAQ:AAPL) investors may be happy about the firm’s return program, but they’re skeptical about the company’s future. Despite the fact that the company will certainly remain one of the most powerful forces in the mobile device market for years to come, investors are looking for magic out of Cupertino, and that means new product lines, something the company has been loathe to offer.
Since the announcement of the dividend, stock in Apple Inc. (NASDAQ:AAPL) has increased by around 7 percent. The firm will spend $11 billion per year to shareholders under the new dividend program.