What is a Dividend Reinvestment Plan (DRIP)?

A Dividend Reinvestment Plan (DRIP) allows investors to automatically reinvest their dividend payments to purchase additional shares of stock in the same company, often at a discounted price and without paying transaction fees.

How does a DRIP work?

In a DRIP, dividends paid by a company are automatically used to buy more shares of the company’s stock. The process is automated, meaning investors don’t need to manually reinvest their dividends or make new purchases. The reinvested shares are often purchased at a discount and without fees.

Are there any fees associated with a DRIP?

Many DRIPs do not charge fees for reinvesting dividends. However, some companies may charge small administrative fees, or there may be fees for reinvesting dividends through brokers. Always check the terms of the DRIP to understand any potential costs involved.

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What is DIVIDEND REINVESTMENT PLAN (DRIP)?

DIVIDEND YIELD

Dividend Yield measures dividend returns as a percentage of market price, offering insight into income potential.

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