Strategy Beginner: Dividend Reinvestment Plans

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1.
What is a dividend reinvestment plan?
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A plan through which a shareholder can reinvest dividends in additional shares of stock. These shares are bought from the company.
2.
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.
3.
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.
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.
With a dividend reinvestment plan, the shares you purchase can be new, or they can be already-existing shares. If they are already existing, how do they get to you?
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A trustee outside the company buys them on the market. After doing this, the trustee hands them to the company, which issues them to you.