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Costco unveiled on Tuesday plans to unleash a special dividend amounting to $3.1bn as the wholesale club looks to return more capital to shareholders and take advantage of low interest rates.

The group said that it will issue a $7-per-share dividend payable on May 26 to shareholders of record at the close of trading on May 10. The dividend will be in addition to the regular quarterly dividend of 50 cents a share, which was itself upped by a nickel.

Costco, which is famous for its cavernous warehouse-like stores, said that it will fund the payout through “additional borrowings”. It comes as interest rates remain historically low, although the Federal Reserve has said it plans to begin raising rates at a more aggressive rate.

“Our strong balance sheet and favourable access to the credit markets allow us to provide shareholders with this dividend, while preserving financial and operational flexibility to continue to grow our business globally,” said Richard Galanti, chief financial officer.

Costco shares rose 2.8 per cent in after hours trading.

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