$100 Billion Question: What Should Apple Do With Its Cash?

When Apple reported its blowout financial results this week, it disclosed an amazing fact: The company is now sitting on $97.6 billion in cash. So what will the tech juggernaut do with all of that money? Company executives were tight-lipped on the post-earnings conference call, saying only that they were “actively” considering alternatives.

Given Apple’s track record, the most likely outcome — apart from doing nothing — is a stock buyback, in which the company would purchase its own shares. Investors would cheer such a move, which would boost the company’s stock price. Or the company could decide to issue cash dividend to shareholders, but that’s less likely. The company hasn’t issued a dividend since 1995.

By its own admission, Apple is somewhat hamstrung in its options for its mountain of money. During the conference call, Apple CFO Peter Oppenheimer said that the company is holding $64 billion outside the United States. That’s not unusual for a huge global company like Apple, which does so much business overseas. But it does mean that if the company were to bring that money back into the country, it would have to pay a 35% corporate tax rate, which it clearly is not inclined to do. Still, that leaves over $30 billion already in the U.S.

Read more: http://timebusinessblog.wordpress.com/2012/01/26/100-billion-question-what-should-apple-do-with-its-cash/#ixzz1kZEmHMkX