ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Dividend reinvestment can be a good strategy because it is: Cheap: Reinvestment is automatic-you won’t owe any commissions or other brokerage fees when you buy more shares.
Detailed explanation-2: -Some companies offer dividend reinvestment plans (DRP). These enable investors to automatically reinvest dividend payments into new shares in the company. DRPs generally allow investors to reinvest either a portion or all of a dividend payment into new shares.
Detailed explanation-3: -A dividend reinvestment plan (DRIP or DRP) is a plan offered by a company to shareholders that it allows them to automatically reinvest their cash dividends in additional shares of the company on the dividend payment date.
Detailed explanation-4: -With dividend reinvestment, any cash dividends you receive can be automatically reinvested into additional fractional shares of that company.