Ashland Inc. announced it will award a special cash dividend of $10.20 per share.

The chemical company also authorized the repurchase of up to an additional seven million shares of common stock.

The repurchases will be made under a rule 10b5-1 stock trading plan, which permits the company to repurchase stock during “blackout” periods.

Once it completes the latest repurchase program, Ashland will have bought back nearly 20 percent of its shares outstanding on June 30, 2005.

The company said that substantially all of the $1.3 billion in after-tax proceeds from the sale of Ashland Paving and Construction, Inc. were used to fund the completion of the January 25, 2006, share repurchase authorization, and will be used to fund the additional repurchase authorization and the special cash dividend.

“This special dividend and additional share repurchase authorization demonstrate Ashland’s commitment to building value for our shareholders,” said James J. O’Brien, Ashland chairman and chief executive officer, in a statement.