San Francisco - Software giant Microsoft on Monday announced that it planned to buy back up to 40 billion dollars in stock by 2013.

The company also raised its dividend by 18 per cent to 13 cents a share, sending its stock up some 5 per cent in early trading on Wall Street.

"These announcements illustrate our confidence in the long-term growth of the company and our commitment to returning capital to our shareholders," said Chris Liddell, Microsoft's chief financial officer.

Microsoft also said it would offer the markets up to 6 billion dollars in corporate debt as anxious investors seek alternatives to discredited financial institutions.

The announcement of the buy-back plan comes just months after the company completed a previous share buy-back for the same amount. In a statement, Microsoft said it has returned 115 billion dollars to investors in the form of stock repurchases and dividend payments since 2003.

PC maker Hewlett-Packard also announced a stock buy-back programme Monday, authorizing up to 8 billion dollars in shares to be repurchased. (dpa)