Dell and Microsoft are two of the world’s most successful companies in the area of computing and electronic commerce. Both companies generate annual inflows of funds in the billions of dollars. Dell discovered that it could make a higher rate of return on this money by lending it to buyers of its computers instead of simply using all of it to make more new computers. Microsoft accumulated $75 billion in cash. It investigated alternative uses for the funds and concluded that it could not find investments that could yield higher returns than its owners could earn elsewhere. In 2004, Microsoft distributed $32 billion in dividends to its owners and then planned to continue paying high dividends through 2008. How did Dell and Microsoft respond differently to the same evaluation, that there were no investments that could yield higher returns than the market?