When I visit my local Starbucks I spot about half the room swiftly swiping their finger on a sleek tablet device. When I’m at the gym, I often see people tapping the screens of their personal music device to pick that perfect song to push through the rest of a tough workout. When I’m amongst friends, we often debate about which app is the “must have” app for daily life. (Many of us can’t remember a life without apps, it seems) What do all of these scenarios have in common? All of the devices referenced are Apple products.
Apple has done an extraordinary job of creating innovative products that consumers want and most importantly are willing to pay top-dollar for. Recently, Apple announced that it sold over 3 million iPad 3’s during its first weekend in stores! This cult-like following and customer devotion has fueled Apple's financial success; at the end of 2011 it was estimated that Apple had over $100 billion in cash on its balance sheet! So what can a company do with all that cash? Just to name a few options, a company can reinvest into their business to create more innovative products, acquire another company, or share some of the money with investors through what is known as a dividend (a distribution of a portion of the company’s profits to its shareholder).
On Monday, much to the delight of the investing community, Apple (NASDAQ: AAPL) announced that it would pay a quarterly dividend of $2.65/per share starting July 1st. (This is a major step for the company; under the prior leadership of Steve Jobs the company had long resisted the requests from investors for a dividend to be issued)
*AAPL is up over 48% (year-to-date) and is currently priced at $599.34 (at close of market on Thursday 3/22/12)
About the Author: Femi Faoye is the Co-Founder and Chief Executive Officer of D.R.E.A.M. He’s a staunch and passionate financial literacy education advocate.
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