It is every business’s goal at conception to become a household name and have millions of customers. A relatively miniscule number of these companies actually attain this goal, but one has definitely succeeded.
Since its beginning in 1976, Apple Inc. has been at the forefront of technological innovation and production. This enterprise has gone from creating boxes that most of us wouldn’t even recognize as being computers to crafting some of the most state-of-the-art products, all in just 40 years. Apple’s success is just about unparalleled, and the company now has to decide what to do with the vast stockpile of cash in its possession.
Chances are you have owned an iPhone, iPod, iPad, Mac computer or any of the other Apple products on the market today, at some point. If you haven’t, you have definitely seen them. Apple is everywhere.
Few companies can boast this magnitude of success. Even less can report the abundant amount of cash reserves Apple has acquired as a result of consecutive profit-gaining years. The estimated figure is approximately $108 billion. It may seem like the more cash a company has on hand the better, but this is not true.
From a stock market investment standpoint, if a company has a lot of money sitting around not being used for anything, investors will think the company is lazy and not utilizing all its assets. This has the potential to be quite damaging to a company, but considering how large Apple is, it hasn’t had much of a negative effect. There are many different investment strategies a company can use with leftover cash that will increase its stock value, and it seems Apple is finally going to take action.
Apple executives announced Monday that the company will be taking a chunk of its reserved cash and rewarding investors with an increase in dividends.
Surprisingly, public businesses that trade shares of their company on the stock market don’t actually have to pay dividends to their investors. However, if a company were to neglect its investors and not reward them for their financing, no one would want to put money into the company.
According to an article by Nick Wingfield in The New York Times, the dividend Apple has declared will be a quarterly amount of $2.65 a share. This is a huge amount of money they are going to hand out. Interestingly, even though once this plan takes effect and Apple becomes one of the highest dividend-paying companies in the world, it will still have a relatively low investment return. This is because Apple shares go for about $600 dollars each.