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.
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.
3.
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.
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.
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.