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Microsoft Board Declares Dividend

The Microsoft Board of Directors on Wednesday declared a regular quarterly dividend of 8 cents per share that will be payable Dec. 2.

The dividend will go to investors who hold shares as of the end of business on Nov. 17. Microsoft's dividend declaration follows through on a plan to reduce its cash reserves that the company laid out in July.

In effect, Microsoft has doubled its regular dividend payments. In the past, Microsoft paid a dividend of 16 cents per share per year. Now the company is paying out 8 cents per quarter, or 32 cents per year. Over four years, Microsoft expects the regular dividend plan to cost $14 billion.

Other components of Microsoft's cash draw-down plan include a special per share dividend of $3, also payable on Dec. 2. In a statement Wednesday, Microsoft cautioned that that huge one-time dividend is "conditioned upon shareholder approval of amendments to the company's employee stock plans that will allow certain adjustments to employee equity compensation awards to offset the impact of the special dividend payout."

The one-time dividend is expected to use up about $32 billion of Microsoft's $56 billion cash pile. Microsoft also plans a four-year stock buyback program that it estimates will cost $30 billion.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.