CBS hikes dividend, okays buyback

NEW YORK (CNNMoney.com) -- CBS announced Tuesday that its board has approved an increase in the quarterly dividend as well as a $1.6 billion stock buyback.

The new dividend of 25 cents per share will be payable to investors Oct. 1, 2007.

"Raising our dividend and using a portion of our excess cash to buy back shares reaffirms CBS's commitment to return a sizable portion of our strong free cash flow to shareholders," CEO Leslie Moonves said in a statement.

"Since January 1, 2006, we have raised our quarterly dividend by nearly 80 percent."

Shares of CBS (Charts, Fortune 500) closed Friday at $31.51 on the New York Stock Exchange.