Microsoft incorporated in 1986 and didn't pay a dividend until 2003. According to the Jan 16, 2003 Seattle Post-Intelligencier, at the time the dividend was announced, Microsoft had a cash surplus of $43.4 billion and 4.2 billion shareholders. The initial dividend was $.08/share. Bill Gates received $99.5 million in dividend payments!

Why do you think so many people invested in Microsoft when there was no dividend payments until 2003? Why do you think Microsoft finally started paying dividends?

Follow this link to FAQ's on Microsofts Investor Relations page. http://www.microsoft.com/investor/InvestorServices/FAQ/default.aspx (Links to an external site.) . Page down to the first table for dividend history and the second table to stock splits. Why do you think Microsoft has had so many stock splits? How might investors have reacted to the stock splits? Why?