Microsoft shares the wealth :: essays research papers

Why MICROSOFT decided to endure dividends in 2003?1.1 The company might see itself stepping in Maturity Stage -Harder to grow, taxation growth slide downInvestors buy wrinkle for one of dickens reasons either it go forth grow in value or pay a dividend. If a company stops growing, stockholders will demand a dividend. If they dont get it, they will sell their stock. In the history, Microsoft enjoyed incredible growth, so dividend was unnecessary. young Microsoft dividends may tell us that the company has ended its growth phase and is now a mature company. -More competitions from Open source like Linux and pass on officeWindows and Office continue to supply most of Microsofts profit. that that profit is being squeezed as more than and more companies are victimization Linux servers and even Linux desktops. For example, China is developing its own OS (Operating System) and planning to utilisation for the whole country (their intention is to keep Microsoft away from the count ry). The company has been force to slash prices for some key customers to avoid large scale defections, which leads to difficulties to locate the right price because high price may reduce the market share, but low price to compete against open source may reduce its core revenue.1.2 Expecting the stock price will increase later dividends paid - Investors squeeze out buy more sharesExperts say most investors will also likely use the extra cash to buy more shares. And theres no guarantee the investors will spend silver in the economy. Indeed, most investors will probably reinvest it or keep it in a cash account at their brokerage.- Stocks buyback policy from Microsoft itself horizontal if Microsoft use Optimal Distribution Policy in which there is a balance between cash dividends (around 32 billions USD) and stock repurchase (around 30 billions USD). This may affect the decrease in stock price a little while after the announcement of dividend payout, however investors still fore cast for the rising price in the future.1.3 The company reserves the great aggregate of cash liquidityAs we can see from the article that Microsoft can pay around 32 billions USD for cash dividend, 30 billions USD for stocks repurchase and other 3 billions USD, for the goodness, to Bill & Melinda Gates foundation.Agree / Disagree with the decision, explain why?AGREE becauseIAs the company is reaching the maturity stage, dividend payout is other option instead of company growth onlyI30 billion USD buy back will contribute to keep the stock value up and make investors happy