Apple Inc. (NASDAQ:AAPL) pays out its quarterly dividend tomorrow—an amount that adds up to almost $3 billion in total. The $3.05 per share dividend will be paid out to shareholders of record as of the end of the trading day on Wednesday.
Apple pays dividend on Nov. 14
About a month and a half after every quarterly report, Apple Inc. (NASDAQ:AAPL) pays its dividend. That happens to be Nov. 14. The reason shareholders have to be on record as of an earlier date is because of the ex-dividend accounting principle. That principle basically means that after someone sells shares of any stock, it takes three business days for the sale to finally settle within the markets.
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Adjusting Apple’s value ex-dividend
Whichever exchange the company is listed on adjusts the company’s stock value by the value of the dividend because paying a dividend cuts the company’s value since it comes from the cash holdings, according to Daniel Eran Dilger of Apple Insider. The adjustment is offset by shareholders continuing to expect more dividends in the future and the company’s share buyback, which reduces the number of Apple shares which are available for investors to purchase.
Over the last year, Apple Inc. (NASDAQ:AAPL) has paid out about $2.5 billion in dividends per quarter. That amount rose 15% to $2.8 billion this year after the company decided to increase its dividend payments. Of course the more shares Apple buys back, the less it will pay in dividends. After buying back the 47 million shares it has bought this year, Apple will pay out $143 million less in dividends. In addition, the company’s earnings per share increases, although its market capitalization falls. In exchange, however, the company’s fundamentals provide support for a higher share price because there are not as many shares to go around for investors.
And the fact that Apple Inc. (NASDAQ:AAPL) bought back shares when its price was down saved it money as well. If the company had repurchased shares now at around $520 each, it would have paid out an extra $3.1 billion if it had waited until now to buy them.