“No one can deny that today is ‘Apple’s Age’ and indeed, Apple’s economic impact is quite substantive,” Bachar Samawi writes for SeekingAlpha. “With its latest announcement for a $10 billion stock buyback and $2.65 per share quarterly dividend, Apple’s cash infusion into the economy is paramount to an economic stimulus, the Apple Stimulus.”
“During the next three years, such stimulus will add up to about $45 billion, or about $15 billion per year. Relative to the massive size of the U.S. $15 trillion economy, such a number may sound minimal at 0.1% of U.S. GDP. However, when U.S. GDP is expected to grow by an average of about 2.5% for 2012, Apple’s annual $15 billion is about 4% of the expected change in U.S. GDP,” Samawi writes.
“It should be noted that when applying economics 101, dividend payments will not actually result to a change in the current calculation for GDP; dividends do not represent goods and services from current production, hence, having no immediate impact on current GDP estimates and gross domestic income,” Samawi writes. “However, such Apple stimulus will have a positive effect on the economy and markets in the following three ways.”
1. Increase in personal income
2. Dividend reinvestment
3. Capital gains
Read more in the full article here.