Which of the Following Statements Is NOT a Possible Benefit

question 6

Multiple Choice

Which of the following statements is NOT a possible benefit of dividend reinvestment programs (DRPs) ?

• A) Owners of shares that pay dividends do not have to pay brokerage fees if they want to reinvest the proceeds.
• B) A company will sell new shares normally at a discount of 2.5 - 10 per cent off the market price.
• C) DRPs allow a company to preserve its cash flows and receive a low cost source of capital.
• D) Shareholders who choose not to participate in the DRP will find that their proportional ownership is eroded over time.

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