I’ve just published a new post over on Media Industry Blog
Apple’s decision to use approximately half of its vast $97 billion cash surplus in a mix of dividends and stock repurchase says as much about the company from a strategic perspective as it does financially.
In these days of low interest rates on savings, having large reserves of cash isn’t the strategic plus it once was, which is why financial analysts and investors haven’t exactly been getting wildly excited about that $97 billion being left to sit in the bank. By deciding to pay a dividend to shareholders and to repurchase stock, but to leave half the money untouched, Apple is able to have its cake and eat it. It has sent a positive message to the market, allowing investors to share further in the company’s current prosperity but at the same time it will retain approximately $50 billion, a vast chunk of working capital. Read the full post here.