There Are Two Types of Dividend Reinvestment Plans

question 66

True/False

There are two types of dividend reinvestment plans.Under one type of plan,the firm uses the cash that would have been paid as dividends to buy stock on the open market.Under the other type,the company issues new stock,keeps the cash that would have been paid out,and in effect sells new stock to those investors who choose to reinvest their dividends.

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Definitions:

Call Reluctance

The hesitation or fear of making outbound sales calls or contacting potential customers, often based on fear of rejection or failure.

Prospects

Potential customers or clients who have been identified as having a need or desire that a company's product or service can fulfill.

Cold Calling

The practice of contacting potential customers who have not previously expressed interest in a product or service, often through phone calls.

Law of Averages

The principle stating that over a large number of trials, outcomes will roughly equal the probability of an event occurring.