Finance Class: Microsoft is to return $75 billion to its owners

"Microsoft is to return $75 billion to its owners in the biggest-ever disbursement of its kind. The company had resisted making any payouts for years, but the maturing of its business and the ending of many of its legal battles have left it with no more excuses"

CONVENTIONAL wisdom holds that companies ought to pay out their cash in the form of regular dividends in order to satisfy shareholders. This is partly because those shareholders need something to live on, and partly because such payouts prevent companies from squandering the money on stupid investments. For more than a decade and a half after its shares were publicly listed, in 1986, Microsoft flouted that wisdom. It refused to pay a dividend until last year, and then only started to pay a tiny one. It was able to get away with this miserliness because its heady rate of growth made its shares a must-hold for many investors. Microsoft’s bosses also argued that they had to keep a huge cash pile on hand to cover possible settlements arising from the firm’s antitrust battles. But now, finally, the company’s bosses have capitulated. On Tuesday July 20th, Microsoft said it would return a whopping $75 billion to shareholders over the next four years, in the biggest corporate cash disbursement in history...

Economist.com