In surprise move Microsoft to pay dividends
Investors have long demanded that Microsoft part with some of its cash hoarding by paying them dividends. In a surprise move that's exactly what the company is going to begin doing albeit on a small scale according to this New York Times story (registration required):
The company also announced that it would split its stock 2 for 1. Financially, the annual dividend of 16 cents a share, before the split, amounts to corporate pocket change. Microsoft's two largest shareholders, Mr. Gates and Mr. Ballmer, will receive yearly dividends of $97.9 million and $37.6 million, respectively, based on their current holdings. The annual dividend payout will cost Microsoft about $856 million a year.
Today, Microsoft sits on a cash pile totaling $43.4 billion, and its business generates cash at the rate of $1 billion a month.