Strategy Beginner:
Dividend Reinvestment Plans
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1.
Benefits of dividend reinvestment plans to investors include all of the following except _______.
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Discount brokerage fees
Discounts on company products or services
Options to purchase additional shares
None of the above
None of the above. Investors may receive discounts on brokerage fees, company products, and the option to purchase additional shares.
2.
What is a dividend reinvestment plan?
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A plan through which a shareholder can reinvest dividends in additional shares of stock
The use of dividends to pay for the maintenance of a shareholder account
The option of not using a brokerage service
A privileged class of stock
A plan through which a shareholder can reinvest dividends in additional shares of stock. These shares are bought from the company.
3.
Through a dividend reinvestment plan, you can purchase shares of stock for a reduced brokerage fee.
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True
False
True. You can purchase them free of brokerage commissions.
4.
"Old stock," or stock that already exists, is issued to DRIP owners _______.
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At market price
At a discount to the market price
For free
At market price. No discount is applied.
5.
Dividend reinvestment plans benefit only employees of companies that have these plans.
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True
False
False. Dividend reinvestment plans benefit corporations and individuals who take advantage of them.
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DONE