It's official: President Trump has now signed the Republican tax bill into law. As far as Apple (NASDAQ:AAPL) is concerned, one of the more pertinent aspects of the bill was always going to be repatriation rates. With a massive $252.3 billion in foreign cash at the end of the third quarter, Apple would be among the biggest beneficiaries of favorable repatriation rates. The final bill set a one-time repatriation tax of 15.5% for foreign cash, up slightly from the 14% to 14.5% that had been in earlier versions.

That's a significantly lower rate than the 35% that Apple would have previously had to pay under the outgoing tax system, and in line with what CEO Tim Cook considers "reasonable." In an interview with Bloomberg Businessweek in June, Cook suggested 15% to 20% would be reasonable.

Steve Jobs Theatre at Apple Park

Image source: Apple.

Now what

With the bill being signed into law just this morning, Apple will now start contemplating how much it wants to bring home. Longtime Apple analyst Gene Munster has weighed in, and expects the Mac maker to repatriate $214 billion at the 15.5% rate. Once that cash is brought home, Apple will likely allocate most of it toward its aggressive capital return program.

Speculating on blockbuster acquisitions that Apple could pursue is a market pastime, but it's unlikely that Apple will meaningfully change its merger and acquisition (M&A) strategy, in Munster's view. The company will likely still focus on acquisitions that cost $1 billion or less and revolve around technology that Apple can integrate into future products.

For what it's worth, Cook has said on several occasions in recent years that Apple is open to considering large deals if they're the right fit, but it has yet to top its 2014 acquisition of Beats for $3 billion. The company did recently confirm that it acquired music-recognition service Shazam earlier this month, which was rumored to cost around $400 million (Apple did not confirm the price publicly, but may disclose some detail in its next 10-Q).

Investors will know for sure in a few months

Munster believes that Apple will add $69 billion to its share repurchase program, which would be on top of the $166 billion that Apple has repurchased through Q3 2017. The Mac maker might also bump its dividend more in 2018 than in prior years, potentially increasing its payout by 15%. Apple increased its dividend by 10% in 2016 and 10.5% in 2017, and updates its capital return program every April or May when it reports fiscal second-quarter earnings.

Apple could theoretically extinguish its debt in order to eliminate interest expense, but Munster thinks the company will simply maintain its existing debt load of around $104 billion. The company likely then wouldn't need to take on more debt to fund its capital return program over the next three years, instead using the repatriated cash in conjunction with ongoing free cash flow generation.

The capital return updates over the past few years have been fairly standard stuff (for Apple, at least), boosting the program on an annual basis with an emphasis on share buybacks. The upcoming update (after Apple has a few months to contemplate its options) is going to be a whopper.

Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Apple. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.