reinvestment plan

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Reinvestment Plan

A practice or agreement in which dividends on a security are used to buy more of the same security, rather than disbursed to the investor in cash. A reinvestment plan is relatively common in mutual funds; investors agree to use dividends and other capital gains to reinvest in more shares of the mutual fund. While this involves assuming more risk in the mutual fund, it carries the possibility of higher returns.

reinvestment plan

References in periodicals archive ?
equi serve, corn), a company that allows investors to make direct investments in publicly traded companies through Dividend Reinvestment Plans (DRIPs).
com--provides a database of 1,600 companies that offer direct stock purchasing plans (DSPs), Dividend Reinvestment Plans (DRIPs), and access to a Mutual Fund Center.
Dividend reinvestment plans are a consistent, long-term way of saving to accumulate shares and wealth,'' said Vita Nelson, editor and publisher of The Money Paper.
The plans also reinvest all or partial dividends paid into more stock, thus the name ``Dividend Reinvestment Plan.
We consider dividend reinvestment plans (DRPs) in inefficient markets.
By eliminating the discount, this brings the terms of the Plan in line with those of most other dividend reinvestment plans offered.
These direct stock-purchase programs are enhanced versions of dividend reinvestment plans or DRIPs.
The fast-food chain is among a growing list of companies that are bypassing brokers through dividend reinvestment plans, or DRIPs.
Most companies that issue dividend-paying stock also have automatic dividend reinvestment plans.
Dividend reinvestment plans do have some disadvantages, particularly in the area of taxation.
In fact, more than 1,000 companies allow investors to use this approach to buy company shares by offering dividend reinvestment plans (DRIPS).
One of the easiest and most affordable ways to build an investment portfolio is through a program called the dividend reinvestment plan (DRIP).