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:

Binge-Eating Disorder

A serious eating disorder characterized by frequent episodes of consuming very large amounts of food followed by feelings of shame, distress, or guilt.

Bulimia Nervosa

Eating disorder characterized by binge eating followed by purging of food (vomiting).

Pepsin

Enzyme secreted by gastric glands that digests proteins to peptides.

Hydrochloric Acid

A strong, corrosive acid found in the gastric juices of the stomach that aids in digestion and kills microbes.