Microsoft increases shareholder dividend, announces new buyback

REDMOND, Wash. -- In an era of change and shifting company priorities, Microsoft Corp. announced a new $40 billion stock buyback program and increased its dividend 22 percent Tuesday morning.

The company's quarterly dividend will raise to 28 cents a share, payable on Dec. 12. The $40 billion buyback program replaces an older program sent to expire at the end of the month.

“These actions reflect a continued commitment to returning cash to our shareholders,” Amy Hood, chief financial officer of Microsoft, said in a company release.

Shares rose 3.5 percent in early trading following the announcement.

The company, founded in 1975, is currently seeking a replacement for outgoing Chief Executive Officer Steve Ballmer.