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Apple Squeezes Out A Dividend, Buying Back Stock

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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%.