Sept. 22 — Microsoft Corp. increased its quarterly dividend by 3 cents, or 23 percent, to 16 cents a share and got support from its board to vend as much as $6 billion in additional debt.
Tuesday, Microsoft Chief Financial Officer Peter Klein said “This higher dividend, combined with our ongoing share repurchase program, reflects our commitment to returning capital to our shareholders and our confidence in the long-term growth of the company.”
According to a source, Microsoft is planning to sell debt this year to compensate for dividends and share repurchases because much of its cash is held abroad. The company will try to raise as much as possible without risking its debt rating of AAA, said the person who hid in anonymity as the information is confidential and incomplete.
San Francisco-based UBS AG analyst, Brent Thill said that the dividend increase was a sign Microsoft is confident in its ability to generate cash.
“While not as high as some Street expectations, it was a larger incremental increase than the 2-cent dividend hike Microsoft’s board approved in fiscal year 2009,” Thill said on his note to clients.
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