Strategy Beginner: Dividend Reinvestment Plans

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1.
When buying shares through a dividend reinvestment plan, you may actually receive newly issued shares.
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True. In some cases, the company issues brand-new shares.
2.
In most cases, before you can participate in a dividend reinvestment plan, you must purchase your original shares _________.
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From a broker. Most, but not all, companies require this.
3.
Benefits of dividend reinvestment plans to investors include all of the following except _______.
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None of the above. Investors may receive discounts on brokerage fees, company products, and the option to purchase additional shares.
4.
"Old stock," or stock that already exists, is issued to DRIP owners _______.
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At market price. No discount is applied.
5.
A benefit of dividend reinvestment plans to corporations is that they are an inexpensive way to borrow money.
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False. They are an inexpensive way to raise capital without borrowing money.