News Summary: Costco to spend $3B on $7 dividend

AP News
Posted: Nov 28, 2012 1:38 PM

BIG PAYOUT: Costco will spend $3 billion to pay its shareholders a special dividend of $7 per share next month ahead of higher tax rates that may kick in come January.

THE TREND: Many companies are making special end-of-year dividend payments or moving up their quarterly payouts because investors will have to pay higher taxes on dividend income starting in 2013, unless Congress and President Barack Obama reach a compromise on taxes and government spending.

THE BACKDROP: Investors have paid a maximum 15 percent on dividends since 2003. But that historically low rate is set to expire in January. And a political compromise could still raise the rate.