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.
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.
3.
"Old stock," or stock that already exists, is issued to DRIP owners _______.
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At market price. No discount is applied.
4.
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.
5.
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.