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Microsoft Shareholder Payout Raised US Incomes, Worsened US Deficit

When Microsoft issued an unprecedented $32.6 billion stock dividend payout to its shareholders in December, the company had a huge effect on the US economy, the US Department of Commerce said this week. According to the agency, the payout raised the average income of US citizens and will likely worsen the nation's deficit. Overall, the US economy will "become more negative" because of the payout because so many of the company's shareholders live overseas.
According to the Commerce Department, $24 billion of the $32.6 billion payout will be recorded as personal dividend income, enough to raise the average US personal income by 2.9 percent for the month of December. The income rise is the largest since 1993.
The payout has also negatively affected Microsoft's cash balance, and we'll see how dramatic that change is later this week when the company issues its first post-payout quarterly earnings report. Before issuing the dividend, Microsoft had more than $64 billion in cash or cash-like assets on hand; the company also earns a few billion to several billion dollars a quarter. Microsoft issued its one-time, $3-a-share payout in a bid to reduce its massive cash stockpile after resolving most of its major legal battles last year.


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