Apple announced today that it will begin divvying up its cash among its shareholders, initiating a quarterly dividend of $2.65 per share and authorizing a $10 billion stock buyback program that will cost $45 billion over three years out of Apple’s $97.6 billion.

It’s a move many institutional and other investors have been recommending but that the late company head Steve Jobs had resisted. It also will invite reconsideration from fund managers who only hold dividend-paying companies.

This is the largest-ever dividend initiation for a company in the Standard & Poor’s 500 Index, Bloomberg reported. The dividend payout works out to about $10.60 annually and carries a yield of 1.81 percent, the Wall Street Journal reported, lower than Microsoft Corp and Intel Corp. – whose respective dividend yields currently stand at 2.45 and 3.03 percent – but comparable to or higher than Hewlett-Packard Co. (2 percent), IBM (1.5 percent) and other tech companies.

Apple CEO Tim Cook said the quarterly dividend will kick in July 1, the fourth quarter of Apple’s fiscal 2012, with the stock repurchase program following this coming September 30, fiscal 2013.

“We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure. You’ll see more of all of these in the future,” he said. “Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business.”

Premarket trades indicated investor’s approval, with Apple opening today at $598 a share, a 2.2 percent gain. Click here for the latest price.

“Combining dividends, share repurchases, and cash used to net-share-settle vesting RSUs, we anticipate utilizing approximately $45 billion of domestic cash in the first three years of our programs,” said Peter Oppenheimer, Apple’s chief financial officer. “We are extremely confident in our future and see tremendous opportunities ahead.”

Related links:

Apple – press release

Apple – Audio of conference call (expires March 31, 2011)

Reuters – Apple finally shares $98 billion cash hoard

Associated Press – Apple to pay dividend, start stock buybacks

Bloomberg – Apple to Pay Dividend, Buy Back Stock to Return Some of Cash

Wall Street Journal – Apple to Pay Dividend, Plans $10 Billion Buyback

New York Times – Flush With Cash, Apple Plans Buyback and Dividend

Los Angeles Times – Apple to use huge cash hoard for dividend, stock buybacks

Mercury News – Apple announces dividend, stock buyback

Photo of Apple Store in Pudong Square, Shanghai, courtesy of Apple