Group 3 The document discusses Apple Inc., including its founding in 1977, current CEO Tim Cook, and products such as MacBooks, iPads, and iPhones. It also contains two case studies about Apple: 1) that Apple does not pay dividends, but investors benefit from stock price appreciation, and 2) that Apple conducted a $20 billion stock buyback program in 2008 to boost earnings per share. The buyback reduced shares outstanding and increased the value of remaining shares.

1. Group 3
Adli Rafdi Annas
Gerald Prayogo
M. Heickal Pradinanta
Farah Aulia Zulfa

2. Apple Inc.
• Founded in April 1, 1977 in Cupertino, CA
• Founders: Steve jobs, Ronald Wayne, and Steve
Wozniak
• Current CEO: Tim Cook
• Key people: Arthur D. Levinson (Chairman)
• Number of locations: 437 Apple retail store in 15
countries
• Number of employees: 98000 employees

3. Products
• Macbook
• iPad
• iPod
• iPhone
• Apple TV
• Apple Watch
Others:
• Electric vehicles (iCar) and Software.

4. Case #1

5. Apple's stock price is high, but do
they pay dividends?
• “Apple does not currently pay dividends on its
common stock. Apple paid dividends from June 15,
1987 to December 15, 1995.”
(Source : http://investor.apple.com/faq.cfm)
• Then what about apple’s net income and stock
price?

6. If Apple does pay dividends If Apple does not pay dividends
Apple gives the dividends to the
investors, to be re-invested.
Apple keeps the dividends money
to themselves, to further finance
them.
The dividends money is given
within a certain period of time
When apple is wound up or sold,
the proceeds go to the investors
(terminal dividend)
Profitable if the investors can get
better returns than Apple’s
Profitable if the investors can’t get
better returns than Apple’s
• Current Apple’s return on equity : 42%
• Apple’s investors get their profits by Apple’s huge appreciation of stock price

8. Date
Case #2

9. Apple’s Stock Buyback
• In 2008, Apple receive a big receive a big cash for $24.5 billion as of
September and growing at the rate of $8 to $10 billion a year when
the company’s stock is trading at a unusually low (for Apple)
multiple of 15 times earnings. Then Apple decides to buyback it’s
stock with estimation that a $20 billion buyback program would boost
it about 9%. And if the $20 billion program were front-loaded —
completed in the first fiscal quarter of 2009 — the company’s EPS
could jump as much as 15% (or $0.75 a share).
• Why does Apple buyback it’s stock?

10. • A share repurchase reduces the number of shares
outstanding (i.e. supply), it increases earnings per share and
tends to elevate the market value of the remaining shares.
When a company does repurchase shares, it will usually say
something along the lines of, "We find no better investment
than our own company."

11. Apple’s stock price

12. Conclusion & opinion
• Despite not paying dividends, Apple can still attract
investors due to its high return
• Buying back its own stocks is an effective way to
increase EPS