Strategy Beginner: Dividend Reinvestment Plans

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1.
Through a dividend reinvestment plan, you can purchase shares of stock for a reduced brokerage fee.
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True. You can purchase them free of brokerage commissions.
2.
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.
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.
Dividend reinvestment plans benefit only employees of companies that have these plans.
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False. Dividend reinvestment plans benefit corporations and individuals who take advantage of them.
5.
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.