New York, Oct 29: The world's largest computer company, International Business Machines Corp., said on Tuesday its board of directors had authorized it to spend up to $3.5 billion to buy its stock on the open market. The Armonk, New York , company also said it would pay a regular quarterly dividend of 16 cents per share on Dec. 10 to stockholders of record as of Nov. 10.

IBM named Joan Spero, president of the Doris Duke Charitable Foundation and a former U.S. Undersecretary of State for Economic, Business and Agricultural Affairs, to the its board of directors effective Jan. 1, 2004 .

IBM said the last time its board authorized a share buyback was April 30, 2002 , when its directors also approved an amount of $3.5 billion. Companies typically buy back shares to prevent dilution of earnings that occurs when they issue new shares through stock options. Buying back shares can increase earnings per share as the number of a company's outstanding shares decreases.

Chief Financial Officer John Joyce said earlier this month that IBM had spent $1.3 billion during the third quarter to buy back about 16 million shares and that the company had $2.5 billion left in funds from the April, 2002 authorization. Bureau Report