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:

Increasing Debt

This refers to a situation where an entity, be it an individual, company, or government, experiences a continuous rise in the amount of money owed to others.

Uneven Prosperity

Refers to a situation in which economic growth or wealth accumulation benefits certain groups, sectors, or regions more than others, leading to disparities in income and living standards.

Veterans Bureau

A government agency established to provide services and support to veterans, particularly relating to healthcare, rehabilitation, and benefits administration.

Warren G. Harding

The 29th President of the United States, serving from 1921 until his death in 1923, known for his return-to-normalcy post-World War I policy.