Would Apple, Inc. Stockholders be Better Financially if They Received Research Paper

Would Apple, Inc. Stockholders be Better Financially if They Received Dividends Annually - Research Paper ExampleInvestors present their money on the assumption that though dividends may not be paid for considerable power point of time, the capital appreciation due to growth will significantly justify the non-payment of dividends. The overall direction make up ones mind up by Steve Jobs for Apple was based upon not paying the dividends and to accumulate a hoard of interchange which can be subsequently utilized in terms of making investments into innovation. As a aftermath of this policy, Apple went on to accumulate a large quantity of cash, the returns on which were relatively unkept and was considered as a drag on the returns on equity for the mete outholders of Apple. One of the key reasons as to why Steve Jobs systematically pursued this policy of not paying the dividends is also based upon the fact that Apple barely avoided nonstarter in 1997 consequently Jobs was focuse d upon maintaining a large pile of cash which can potential void any possibility of bankruptcy in future. (Shontell, 2011) Apple Inc, how ever so took a new turn and inform that it will be sharing billions of dollars in dividends to the shareholders. This move has been considered by many a(prenominal) as a al-Qaeda shift from Jobs legacy. ... In order to avoid any such mishap in future, Jobs therefore focused upon piling up cash and neglecting paying the dividends to shareholders. Apple declared its first ever quarterly dividend in 1987 amounting to $ .12 per share however, at the analogous time, Apple also announced a 2 for 1 trite split too. Subsequently, however, Apple experienced losses and it became a less competitive histrion in the market. Due to this sliding, Apple gradually reduced paying the dividends and finally stopped to pay the same to its investors despite making a promising start in the early years of its establishment as a leading PC maker in the world. Recen t Announcement of Dividends After the lapse of many years, Apple recently announced that it will start paying a quarterly dividend and will cash in ones chips $45 billions in the next three years in terms of dividends as well as share buy backs. The recent announcement to pay quarterly dividend however also came with the offer of stock buy back thus signaling that Apple Inc might focus on reducing its owing(p) shares in the market. (Satariano, 2012) Over the period of time, the cash pile up accumulated by Apple Inc was attracting low interest rates. In an economic environment where interest rates are relatively low thus keeping cash reserves as high as over $100 billions was considered as an rash financing decision. Investors therefore were of the view that hoarding such large amount of cash was actually a drag on the return on equity of the shareholders. The recent announcement therefore seems to be an motility towards listening to shareholders and provide them some sort of ret urn in terms of dividends. However, the cash used for the share buy-back as well as dividends