Strategy Beginner: Dividend Reinvestment Plans

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1.
Benefits of dividend reinvestment plans to investors include all of the following except _______.
Choose wisely. There is only one correct answer.
None of the above. Investors may receive discounts on brokerage fees, company products, and the option to purchase additional shares.
2.
Dividend reinvestment plans benefit only employees of companies that have these plans.
Choose wisely. There is only one correct answer.
False. Dividend reinvestment plans benefit corporations and individuals who take advantage of them.
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?
Choose wisely. There is only one correct answer.
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.
"Old stock," or stock that already exists, is issued to DRIP owners _______.
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At market price. No discount is applied.
5.
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.