The company’s quarterly dividend will raise to 28 cents a share, payable on Dec. 12. The $40 billion buyback program replaces an older program sent to expire at the end of the month.
“These actions reflect a continued commitment to returning cash to our shareholders,” Amy Hood, chief financial officer of Microsoft, said in a company release.
Shares rose 3.5 percent in early trading following the announcement.
The company, founded in 1975, is currently seeking a replacement for outgoing Chief Executive Officer Steve Ballmer.