Apple to buy back shares and pay first dividend since 1995

After years of failing to persuade its founder Steve Jobs to return cash to shareholders, Apple's investors finally got their way yesterday as the company said it would resume paying dividends for the first time since 1995 and buy back $10bn (£6bn) of its shares.

Huge demand for its iPhones and iPads has left Apple sitting on nearly $100bn of cash – money Mr Jobs thought should be kept in the company to reinvest in new inventions and developments, but which investors believed should be, at least in part, given to them.

The world's most valuable company yesterday said it would pay a quarterly dividend of $2.65 a share starting in July.

It will then use part of its cash to buy back shares from investors over the next three years.

"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic pre-payments and capital expenditures in our supply chain, and building out our infrastructure," said its chief executive, Tim Cook. "You'll see more of all of these in the future."

He added that the company would retain a "war chest" for other opportunities, saying of the cash returns: "These decisions will not close any doors for us."

Shares in the group leapt $10 in afternoon trade to $595.58 as investors welcomed the news.

In addition to allowing investors to cash in some of the company's gains, the dividend will allow many more funds to buy into Apple's shares, as several major investment businesses are not allowed to back companies which do not pay one.

Apple's chief financial officer, Peter Oppenheimer, said: "We are extremely confident in our future and see tremendous opportunities ahead." He set the regular quarterly dividend at $2.65 a share, which will cost Apple about $10bn a year.