Dividend reinvestment plans DRIPs enable stockholders to

automatically reinvest dividends #6150

Dividend reinvestment plans (DRIPs) enable stockholders to automatically reinvest dividends
received back into the stock of the paying firm. In addition, many DRIPs allow their shareholders
the option to buy more shares directly from the company by just writing a check. The major
advantage is that investors are able to avoid brokerage commissions. Although some plans
require small service fees, these service fees usually pale in comparison to brokerage fees;
however, the specific details of DRIPs will vary from plan to plan. To learn about dividend
reinvestment plans, you need to get back to basics. Let's find out what fools think about them,
specifically the Motley Fool. For this cyber problem, you will be going back to school with
"Motley Fool's School," found at http://www.fool.com/school.htm. From the "Fool's School" front
page, scroll down to "Drip Investing" on the left side of your computer screen. This link will take
you to the "Investing through DRIPs" section of the Fool's School. Make sure you also click on
"starting a DRP" after reading the material on the first screen to answer the following
questions:a. According to the Fool, what are some of the advantages to DRIPs or DRPs, as the
Fool refers to them?b. What variation of the traditional dividend reinvestment plan does the Fool
mention?c. What effects can DRIPs have on participants' investing and consumption habits?d.
Describe the three kinds of DRIPs outlined by the Fool.e. Describe Direct Investment Plans
(DIPs). What are the pros and cons of this program?f. What pros and cons does the Fool
mention for DRIPs/Optional Cash Purchase Plans (OCPs)?
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Dividend reinvestment plans DRIPs enable stockholders to automatically reinvest dividends

ANSWER
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