Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. 9. dividend reinvestment plans dividend reinvestme

9. Dividend reinvestment plans Dividend reinvestment plans (DRIPS) allow shareholders to reinvest their dividends in...

50.1K

Verified Solution

Question

Finance

image
9. Dividend reinvestment plans Dividend reinvestment plans (DRIPS) allow shareholders to reinvest their dividends in the company by purchasing additional shares instead of receiving cash dividend payments. The majority of large companies offer dividend reinvestment plans to their stockholders. These plans allow stockholders to automatically reinvest their dividends in the stock of the firm paying the dividend. Dividend reinvestment plans can be classified as either old stock or new stock plans. Understanding how dividend reinvestment plans work Under dividend reinvestment plan, the company gives any cash dividendo that investors would have received a bank which mit os a trustee. The bank then uses the money to repurchase the company's existing stock in the stock market. The bank then allocate the shares purchased to the participating stockholders' accounts on a pro rata bass, levels of participation in a dividend reinvestment program suggest that stockholders are content with the amount of cash dividenda that the firm is paying out

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

In your view should short selling be banned? Provide evidence to support your answer.

Biology
1.2K views

Name and compare the two major protein secretory pathway’s (Protein Secretory Pathway vs Delivery to endosomes)...

Psychology
1.2K views

What is the role and influence of the news media in American politics? What is \"setting...

Electrical Engineering
1.2K views

Derive a state diagram and table for a single-input and single-output Moore-type FSM that produces an...

Biology
1.2K views

3 Fill in the table Objective Scanning power Low power High power Magnification of Objective...

Physics
1.2K views

When an object floating in a liquid is in stable equilibrium then its centre of...

Physics
1.2K views

A rocket is projected vertically upwards and its time velocity graph is shown in the...

Basic Math
1.2K views

radicals only a 253 2 m 1 62 expression your answer using

Algebra
1.2K views

Question 1 10 points Which is the graph of y x 1 2 O 2...

Accounting
1.2K views

You are purchasing a 15-year, zero-coupon bond. The yield to maturity is 4.85...

Accounting
1.2K views

Ex Your answer is incorrect. Try again. Keaton Accessories wes a perpetual inventory system. The...

Finance
1.2K views

6. Dividends, repurchases, and firm value Remember that the primary goal of a firm is...