Apple did something surprising — but maybe on consideration not so surprising — Monday, announcing its intention to pay dividends to its investors. The move, as The Washington Post reported, is one that the company’s investors have been clamoring for, but not in line with the philosophies of Apple’s late co-founder, Steve Jobs. So what is a dividend and how does it affect Apple? Here are some basic answers.
What is a dividend?: Dividends are payments that companies make to their investors out of the firm’s profits. Investors often get quarterly dividend payments.
How much is Apple paying?: Apple announced that it intends to pay $2.65 per share, pending approval from its board. The company will begin making the payments sometime during the quarter that begins July 1, The Washington Post reported.
Why did Apple choose to do this?: Investors have been demanding a dividend for a while, particularly as it became clear that Apple was sitting on an increasingly large pile of cash — at least $98 billion. Many analysts said the move is welcome and far overdue, and provides investors with a psychological boost.