Dividend reinvestment plan - A plan which allows private investors to reinvest cash dividends from their investments cheaply and easily back into the market, and so obtain the benefits of compounding.The Plan is managed by an administrator appointed by the company. On the dividend date, shareholders who join the plan are still paid the cash dividend, but the administrator then uses the cash to buy shares in the company on behalf of the shareholder. Any cash left over is sent to the shareholder in the normal way. Dealing commission on such purchases is usually 1%. Note that the Plan Administrator does not have to make the plan available for any and every dividend that the company pays. If it is not made available, shareholders will receive the cash dividend.
Dividend reinvestment plan : a plan which allows private investors to reinvest cash dividends from their investments cheaply and easily back into the market, and so obtain the benefits of compounding.the plan is managed by an administrator appointed by the company. on the dividend date, shareholders who join the plan are still paid the cash dividend, but the administrator then uses the cash to buy shares in the company on behalf of the shareholder. any cash left over is sent to the shareholder in the normal way. dealing commission on such purchases is usually 1%. note that the plan administrator does not have to make the plan available for any and every dividend that the company pays. if it is not made available, shareholders will receive the cash dividend.
Dividend reinvestment plan