Microsoft's Dividend Policy
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(Case Code: FINA011) click on the button below, and select the case from the list of available cases:
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Case Details: |
Price: |
| Case Code |
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FINA011 |
For delivery in electronic format: Rs.
500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges
Themes- |
| Case Length |
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16 Pages |
| Period |
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1975 - 2004 |
| Pub. Date |
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2004 |
| Teaching Note |
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Not Available |
| Organization |
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Microsoft
Corporation |
| Industry |
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Information
Technology (IT) |
| Countries |
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Global |
Abstract:
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By early 2004, Microsoft's cash balance had crossed $50
billion. One persistent investor complaint against Microsoft has been its zero
dividend policy. Microsoft has not paid dividends for 17 years. It believes in
ploughing money back into its R&D (research and development). In part, due to
increasing pressure from shareholders, in 2003 the company declared its first
ever dividend for common stock. More recently, Microsoft has announced plans to
pay back up to $75 billion of its cash to investors over a period of four years.
This includes a one-time special dividend of $30 billion. The case outlines the
evolution of Microsoft's dividend policy and the circumstances leading to the
huge dividend payment in July 2004.
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The case also outlines the possible repercussions of this payment for other tech companies such as Dell, Cisco, and Oracle.
Contents:
Keywords:
Microsoft, IBM (International Business Machines Corporation),
Bill Gates, Steve Ballmer, HP (Hewlett-Packard), CISCO (Computer Information
System Company), Annual dividend, Stock purchase programme, Dividend
reinvestment, Form 1099, Buy back, Bill and Melinda Gates Foundation, US Bancorp
asset management, Intel, Dividend policy
Microsoft's Dividend Policy
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