Microsoft (MSFT) announced Tuesday that it was hiking its quarterly dividend to 16 cents a share from 13 cents a share -- a 23% increase.
The new dividend represents an annual dividend yield of 2.5%, TheStreet reported. Microsoft had not raised its dividend in two years.
"This higher dividend, combined with our ongoing share repurchase program, reflects our commitment to returning capital to our shareholders and our confidence in the long-term growth of the company," CFO Peter Klein said in a statement.
The company's board also authorized it to issue as much as $6 billion of additional debt. The company is planning to sell debt to fund share repurchases and dividends, as much of its cash is held overseas.