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Optional Cash Purchase

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Optional Cash Purchase
A feature of some dividend reinvestment plans allowing participants to use their own cash to buy more shares that the dividends will buy when the dividends are being used themselves to buy more shares. For example, if a dividend will pay for 1000 more shares, and optional cash purchase will allow the investor to buy, say, another 400 on top of the 1000. Most dividend reinvestment plans limit the number of shares or the amount of cash that may be used.

optional cash purchase
The buying of shares of stock through a dividend reinvestment plan that are in addition to shares purchased with the dividend. Most dividend reinvestment plans place an upper dollar limit on each shareholder's optional cash purchases.


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DIRECT STOCK PURCHASE (DSP) Over 1,500 companies have these plans, sometimes called optional cash purchases, which are often offered, as a feature of their DRIP program.
If you have a DRIP, or a direct optional cash purchase account, which permits the purchase of shares at a discount, you have entered into the wonderful world of investment heaven.
More than 950 companies offer these plans, allowing investors to purchase stock, often commission-free, through reinvested dividends or optional cash purchases.
 
 
 
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