[jonknee]

They have the cash and people generally invest in AAPL for reasons other than having a stake in a bond fund, so it makes some sense. Buybacks vs special dividend are debatable, but impossible to say what is better until you see the future share price. They did hike the dividend substantially too so they're playing both angles.

[rdlecler1]

Buybacks will also increase the dividend yield as dividends are distributed across a smaller number of shares.

[jonknee]

No, it will decrease the amount of money they have to pay out in dividends though... Theoretically the yield would decrease since the share price should increase as shares are bought back. That said, they did also announce a dividend increase which should counteract that.

Think about it in round numbers, if there are 1 billion shares and a $1 dividend it's $1bn per dividend payment. If they buy back 100m shares, the next dividend payment would be $900m.

tl;dr dividends are declared on a per share basis, not a total amount that is divided by the current number of shares.

[__blockcipher__]

Come on dude, this is totally wrong.

Dividends are expressed in per share basis but that's not actually how it works, a set amount of money is set for dividends.

Share buybacks increase your % ownership of a company (if you're a shareholder), directly increasing the intrinsic value of your shares