Apple will pay a quarterly divided of $2.65 beginning in the fourth quarter of 2012, the company announced Monday morning. It will also spend $10 billion buying back shares of its own stock over the next three years.
The Cupertino, Calif., company says it will also maintain a substantial "war chest" for acquisitions. With a $546 billion market capitalization, the buyback would amount to 1.8% of outstanding stock at today's price.
Expectations for how Apple would whittle down its $98 billion in cash had helped to fever a 20% run higher from $500 to $599 Monday morning ahead of regular trading.
The dividend of $2.65, annualized at $10.60, would give the stock a 1.77% yield.
Other large and mature tech companies like Intel and Microsoft began to step up their payouts after the tax rate on dividends dropped in 2003. Intel now yields 3% and Microsoft yields 2.5%.