Dividend Reinvestment Plan Definition Example How It Works
What is a Dividend Reinvestment Plan? Another term for it is DRIP. The investors have an option to reinvest their dividends to purchase additional shares of the underlying stock on the dividend payment date rather than taking the dividend out. Most DRIPs allow the shareholders to buy shares at nil commission and a discounted price. In general, the price discount varies from 1% to 10%. In a typical scenario, a person receives dividendsDividendsDividends refer to the portion of business earnings paid to the shareholders as gratitude for investing in the company’s equity....