Microsoft raises dividend, launches $40 billion share buyback program

Microsoft has authorized a share buyback program that will see the company reacquiring $40 billion of its own shares, just over nine percent of the company.

This is the fourth $40 billion buyback program launched by the company, which said that it will complete the first round by the end of this year. Microsoft's most recent buyback was first announced in 2013 and is scheduled to be completed by the end of 2016.

The company's decision to buyback its shares is a move that will likely be popular with investors as it will raise share prices. Microsoft also announced that it will raise its quarterly dividend by eight percent, to 39 cents a share for the quarter. After the announcement, the company's shares increased by 1.21 percent in after-market trading and were at $57.50 per share.

Microsoft is currently in a period of transformation as it moves from being a software business to a cloud computing business. The company is now more focused on providing a range of professional services to its customers as opposed to just selling software and its Windows operating system.

Earlier this year, Microsoft purchased LinkedIn for around $26 billion in cash which was the biggest acquisition it has ever made. This move alone highlights how Microsoft has entirely shifted its focus to the cloud and the announcement of its latest buyback will surely entice any shareholders who may be slightly anxious regarding the state of its transformation.

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