Dividend-Reinvestment Plans
You rarely get something for nothing, particularly when it comes to buying stocks. But one exception is the dividend-reinvestment plans. It lets you buy shares without paying a broker's commission - and often at a discount price.
when you buy stocks in certain companies, the offer you these reinvestment program. They automatically let you use your stock dividends to buy more shares in the company free of a brokerage commission. More companies have have reinvestment plans. Others also giving discounts on the price of the stocks. They do this to raise capital cheaply and to promote shareholder loyalty.
Once you are record as a shareholder, simply sign a form authorising the company to put all of your dividends in additional shares. For example: if you reinvest $100 of dividends in a company that also offers a 5% discount, you get $105 worth of stocks. When you don't have enough to buy a full share, the company credits you with a fractional share.
In short, dividend reinvestment is an easy money-saving way to build up more stock. A good broker can give you the names of companies that offer reinvestment plans.
You rarely get something for nothing, particularly when it comes to buying stocks. But one exception is the dividend-reinvestment plans. It lets you buy shares without paying a broker's commission - and often at a discount price.
when you buy stocks in certain companies, the offer you these reinvestment program. They automatically let you use your stock dividends to buy more shares in the company free of a brokerage commission. More companies have have reinvestment plans. Others also giving discounts on the price of the stocks. They do this to raise capital cheaply and to promote shareholder loyalty.
Once you are record as a shareholder, simply sign a form authorising the company to put all of your dividends in additional shares. For example: if you reinvest $100 of dividends in a company that also offers a 5% discount, you get $105 worth of stocks. When you don't have enough to buy a full share, the company credits you with a fractional share.
In short, dividend reinvestment is an easy money-saving way to build up more stock. A good broker can give you the names of companies that offer reinvestment plans.
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