SEPTEMBER 21, 2010, 7:37 P.M. ET.

Microsoft Raises Quarterly Dividend 23% to 16 Cents

By JOAN E. SOLSMAN

The increase itself isn't much of a surprise. Microsoft has made its last three dividend increases during the board's September meeting, and they tended to stay in line with growth in operating income. Last month, the company's investor relations general manager said it was reasonable to expect that policy to continue going forward.

But the software giant reported an 18% increase in operating income for its fiscal year ended in June, so the dividend increase outpaces the company's growth in earnings.

Tuesday, Chief Financial Officer Peter Klein said the increase was another sign, in addition to the company's share repurchase program, of Microsoft's commitment to shareholder value and confidence in its long-term growth prospects.

Microsoft had about $23.7 billion remaining of its originally $40 billion stock-buyback authorization as of June 30.

The company also said Tuesday the board approved up to $6 billion in incremental commercial paper and longer-term debt.

Microsoft shares were up 0.4% at $25.24 in after-hours trading. The stock has dropped 17% in 2010 through the close, while the broader market is positive so far this year.

Write to Joan E. Solsman at joan.solsman@dowjones.com
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