The world's top software maker Microsoft plans to return more than $75 billion in cash to shareholders over the next four years in the largest corporate pay-out ever.
Shares in the company rose 5% in after-hours trade on Wall Street following Microsoft's announcement that it planned to buy its own stock, double its dividend and issue a special once-off dividend.
Microsoft, which generates about $1 billion in cash per month, said it would still have enough funding for research and to make acquisitions.
Microsoft has been under mounting pressure from investors to return cash to shareholders as its sales growth has slowed, its share price has stalled and it has successfully settled major legal disputes with governments and competitors.
By pledging to return $75 billion in cash - equal to what US President George Bush requested to fight the war in Iraq - over the next four years, Microsoft effectively will use up all of its cash reserves, expected to top $60 billion in the quarter just ended.
Analysts say they believe Microsoft has more than $70 billion in liquid assets, including investments in other companies.
Microsoft's board of directors approved a quarterly dividend of 8 cents per share, effectively doubling the current 16 cents per share annual dividend. Microsoft will also buy up to $30 billion of its own stock over the next four years. The board also approved a special dividend of $3 per share, subject to shareholder approval at the annual meeting in November.
The biggest shareholder, company co-founder and chairman Bill Gates, said that he would be giving his estimated $3 billion pay-out to his charitable trust, the Bill & Melinda Gates Foundation.
