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.
Choose wisely. There is only one correct answer.
True. You can purchase them free of brokerage commissions.
2.
In most cases, before you can participate in a dividend reinvestment plan, you must purchase your original shares _________.
Choose wisely. There is only one correct answer.
From a broker. Most, but not all, companies require this.
3.
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.
4.
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.
5.
When buying shares through a dividend reinvestment plan, you may actually receive newly issued shares.
Choose wisely. There is only one correct answer.
True. In some cases, the company issues brand-new shares.