7% ?

Apple‘s shares could rally as much as 50% if the company were to be more aggressive in paying out free cash flow to shareholders, Legg Mason portfolio manager Bill Miller proposed in an interview with theFinancial Times.

Miller proposes that Apple keep the $137 billion in cash it already has piled up and apply all future free cash flow into the company’s dividend.

The company paid out about $2.5 billion in dividends to holders in the latest quarter, which is a respectable $10 billion annual rate. But the stock even after the recent slide in price the stock has a yield of just 2.4%.

So, here’s the thing. In the September 2012 fiscal year, Apple boosted its cash position by a whopping $40 billion; in the December quarter the total increased another $16 billion. The stuff is stacking up to the ceiling and beyond.

So imagine the company upped the pay out to, say, $30 billion, and the stock had a yield north of 7%.

Think that would get some attention from investors?

Oh, yes, it sure would.