Microsoft shareholders will get a nickel more per share as the company announced a 22 percent dividend increase Tuesday. The company also said it will buy back $40 billion in stock.
(Read more: Microsoft and the dividend )
Ahead of the company's meeting with financial analysts on Thursday, the board approved the new stock repurchase program to replace the previous buyback program, which was set to expire at the end of this month. The new share repurchase program has no expiration date.
(Read more: Pros say Microsoft investors may want to reconsider )
The quarterly dividend was increased to $0.28 per share, up five cents from the previous quarter. The dividend will be payable to shareholders Dec. 12 and applies to all shareholders of record on Nov. 21.
Microsoft, which is known for its shareholder-friendly ways, has been paying a regular quarterly dividend since 2004. The company's last dividend increase was payable last September and was an increase of three cents, making the total dividend amount $0.23.
(Read more: Cramer: 'It's time to break up Microsoft' )
Still, the company's share buyback plan comes at a time when Microsoft is undergoing some major changes.
The company announced earlier this summer that it would launch a major reorganization, shifting the company's focus to tablets and smartphones. Then in August, Microsoft announced its longtime CEO Steve Ballmer would leave the company in the next 12 months.
(Read more: Microsoft's next CEO isn't who you think )
And then earlier this month, the company shocked many investors and analysts when it announced it was buying Nokia's mobile business for $7 billion to compete with other smartphone makers such as Samsung and Apple.
( Read more: Microsoft and Nokia are both dumb about smartphones )