The American software giant Microsoft plans to buy back its own shares worth $40 billion and has also announced an increase in the dividend amount, media reported on Wednesday. Microsoft did not disclose how long the buyback scheme will last. Its previous buyback, also worth $40 billion, was announced in September 2013 and will be completed by the end of this year, BBC reported.
Share buybacks typically support the growth of a company’s stock price and are popular among investors. Microsoft’s stock price rose one percent in electronic trading after the close of Wall Street.
Microsoft also announced that it will raise its quarterly dividend by 8 percent, to 39 cents per share.
Earlier this year, the company announced its largest acquisition in history, the purchase of the professional networking site LinkedIn for just over $26 billion in cash. This is considered a high price for LinkedIn, which reported an annual loss of $166 million.
Microsoft CEO Satya Nadella stated that this is part of Microsoft’s transformation towards cloud computing business and providing professional services to clients, including social networks for their connectivity.
