Mattel Inc. shares rose Tuesday on news that billionaire investor Carl Icahn has acquired a small stake in the company, and that the El Segundo toymaker was expanding its share buyback and dividend programs.

Icahn Capital LP bought 2.4 million shares of Mattel, according to a Securities and Exchange Commission filing, giving it less than a 1 percent stake in company, which has an $8.4 billion market cap.

Mattel separately announced a $500 million increase in its share repurchase program. It also raised the current year dividend by 10 percent to 83 cents a share, and will switch to quarterly dividends next year.

The change “should give investors greater confidence that the dividend is not only secure, but is likely to continue to increase,” wrote Needham & Co analyst Sean McGowan in an investor’s note.

Mattel shares closed up 79 cents, or 3 percent, to $24.34 on the Nasdaq.