Originally Posted by sog35
wrong. Dividends force investors to pay higher taxes.
Read the Intelligent Investor. This is considered one of the definitive investing books of all time. Endorced by tons of people, including Buffet himself. The central premise is to look for stable companies with good management that pay out dividends. Apple is a stable company with good management with no debt that pays the largest dividend.
The tax differences you speak of depend on a lot of variables. For example, is your investment in a retirement account? If so, what kind, a Roth IRA or Traditional IRA? If you are selling stock, how long have you held on to the stock? So, to cite tax differences pretty much means little to many investors, myself included.
Further, buying back Apple's own stock is pretty much a waste of its money and undermines the longterm stability of the company. First, Carl wants Apple to spend all of its $150 billion of its cash buying back its own stock. Since, Apple would be retiring the stock after purchase, what does Apple obtain for the purchase? Nothing. This largely benefits short term investors, who arguably are not investors that Apple should be concerned about. Second, Carl wants Apple to purchase its own stock on an expediated pace. This means Apple would be buying back its own stock that really does not benefit it at a premium. Further, Apple's cash is largely over seas, so to make the purchase it has to 1) bring its money back to the US and take a huge tax hit, or 2) take on debt to finance the purchase. Neither approach is responsible.
Apple rightfully is opposing the measure because Apple has always been a conservative company. From past experience, it knows the future is not predictable. Evaluating pay outs to inventors annually based on current finances is the way to go. Apple likely will recommend an increase in dividends, and a larger cash buyout that it already has, but far short of what Carl wants. That is responsible.