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Apple's Dividend

Following on from my post last week, Apple announced yesterday that it will pay its first dividend in 17 years and repurchase $10 billion of its stock. How did investors respond? They seemed to like the news as Apple stock went up by 2.65%. Why? One possible reason is that Apple could be signalling that it is confident that future cash flows are going to be high. Another possibility is that by paying out some of its $98.6b in cash, it is assuring investors in a post-Jobs world that managers will not dissipate cash flows.


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