Updated from July 20Microsoft ( MSFT) is finally sharing its wealth. Responding to longstanding shareholder pressure, the company's board of directors approved a plan Tuesday to double the software giant's regular dividend, buy back up to $30 billion in stock over the next four years and issue a special one-time dividend of $3 a share. Shares of Microsoft were 75 cents, or 2.7%, to $29.07 Wednesday morning. Analysts hailed the move by Microsoft as "bold" and positive for the stock. "While we might quibble with some of the details and forms of the distribution, we expect that the aggregate amount will appeal to investors and that most investors will find something of which to approve," Sanford C. Bernstein analyst Charlie Di Bona wrote in a note Wednesday. "In general, we expect this announcement will be constructive for the stock." (Di Bona has an outperform rating on Microsoft and his firm doesn't do investment banking.) Microsoft now will pay an annual dividend of 32 cents, with the additional 16 cents representing $1.73 billion a year of new money for shareholders. The boost raises Microsoft's dividend yield to 1.12% based on Tuesday's closing stock price. The quarterly dividend is payable Sept. 14 to shareholders of record on Aug. 25, 2004. The special dividend will be payable Dec. 2 to shareholders of record Nov. 17. The dividend yield still falls short of the S&P 500 yield of 1.7%, but Microsoft management left open the possibility that the board could approve additional increases in the future. "The ultimate dividend yield should be adequate to at least pique the interest of income-oriented investors and retail," Di Bona noted. "We are particularly relieved that management did not ignore this important component of their overall cash allocation planning." All told, including the $32 billion special dividend, the buyback and the higher payout, Microsoft will return up to $75 billion to shareholders over four years. "We looked at a broad range of scenarios and thought that the decision we reached is something for everybody," CFO John Connors said on a conference call Tuesday evening. CEO Steve Ballmer said the company believes the three-pronged package makes Microsoft the top U.S. company in terms of delivering capital return to shareholders for the coming four-year period. Even after that, the Redmond, Wash., titan still will have plenty of cash left over. Microsoft currently carries $56 billion of cash on its balance sheet and generated nearly $16 billion in cash flow from operations in fiscal year 2003. In a press release, Microsoft noted its progress in resolving numerous legal issues facing the company, which were oft-cited hurdles toward spending down its cash. The company is still appealing an antitrust suit in Europe but has settled other suits, including those involving rival Sun Microsystems ( SUNW) and consumer class-action cases in numerous states. In addition, Microsoft recently won an appeal to the settlement of its U.S. antitrust case. The company also stressed that the payout will not affect Microsoft's commitment to research and development. The timing of the announcement Tuesday was certainly a surprise, given that Microsoft had suggested its upcoming analyst day would be the likely venue for describing plans for its cash stash. But the news still didn't immediately help Microsoft's stock break the $30 mark, a ceiling that the stock has been unable to jump since last September. That may be because investors had been chattering about the possibilities for Microsoft spending down its cash for months and a $30 billion stock buyback was widely viewed as one likely scenario. Investors have been complaining about Microsoft's bloated balance sheet for years, urging the company to distribute the money to shareholders rather than earning paltry returns on it.