Microsoft announced a $40 billion stock buyback plan and increased its dividend 22 per cent to reward shareholders as the firm undergoes a change in strategy and leadership.

The repurchase scheme replaces another $40 billion buyback plan that was due to lapse at the end of this month, said the company yesterday.

Microsoft’s quarterly dividend will rise to 28 US cents a share, payable on December 12th to shareholders of record as of November 21st.

The move is a step in the right direction for investors, though the open-ended schedule for the new buyback plan raises questions, said Matthew Hedberg, an analyst with RBC Capital Markets in Minneapolis. "What would be more interesting is if they put more parameters on the timing of the buyback – sooner is better than later." – (Bloomberg)