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Dividend reinvestment plan

Discussion in 'Investing Glossary' started by Glossary, 8th Feb, 2007.

  1. Glossary

    Glossary Active Member

    12th Sep, 2006
    A dividend reinvestment plan (also commonly known as a "DRP") is a facility offered by many listed companies which allows for the automatic reinvestment of that shareholder's dividends to buy more shares of the company.

    DRPs usually are free from brokerage charges and will sometimes allow purchase of shares at a discount to the then prevailing market price.

    DRPs are a good way of automating your investment, providing a form of forced saving.
    Last edited by a moderator: 8th Feb, 2007