Not paying the cash out to shareholders saves Apple a lot. And I'm not the first to say this, but paying out to shareholders isn't exactly the most innovative way to use your cash. It's like saying, "We couldn't think of anything to invest this cash in that will push the business forward, so let's just write you a check."
Income from dividends is taxed at a higher rate than income from capital gains. Therefore, if you're investing in a company and you're not doing it through a retirement plan or a similar tax-sheltered fund, you might rather see profits reinvested in the company and returned to you in the form of a higher stock value than simply given out to you in the form of a dividend.
(I think this tax policy is... unwise, but that's a debate for another time.)
The easy way around that is to repurchase stock to hold in the treasury. Returns cash to the investors through a higher stock price and eliminates the tax delta.
well, this is the big question - how will they use all this cash? having tons of cash and not using it in any way is quite stupid actually.
btw, I read form Balance Sheet that cash and short term investments is 24bn. 35bn is total current assets. slight misrepresentation on reporter's side?
