Microsoft in $40bn stock buyback programme

Microsoft on Monday announced a new stock buyback programme of up to $40bn, sending its stock up more than five per cent in pre-market trading.

The software giant said it would repurchase up to $40bn worth of its shares through September 2013. It recently completed a previous $40bn buyback programme.

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Investors, who tend to cheer stock buyback programmes because it makes existing shares in the market more valuable, pushed Microsoft's stock to $26.50 per share in pre-market trading, up 5.33 per cent.

Microsoft has seen its shares lose roughly 22 per cent of their value since it announced its unsolicited bid for Yahoo! earlier this year, which ultimately failed to take hold.

PC maker HP also announced a stock buyback programme on Monday, authorising up to $8bn in shares to be repurchased.

Microsoft, meanwhile, also announced plans to pay a 13-cent quarterly dividend, which is an 18 per cent increase over its previous quarterly dividend. The dividend will be payable on 11 December to shareholders as of 20 November.

In addition to the stock buyback programme and increased quarterly dividend, Microsoft is also planning to float out corporate debt of up to $6bn. The proceeds from the debt offerings will be used for general corporate purposes, stock repurchases and working capital.

Original article: Microsoft announces $40 billion stock buyback from CNET News.com