What is a Dividend Re-Investment Plan? (DRIP)

Executive Summary When a company pays dividends to a shareholder, that shareholder has two options. They can either pocket the cash and take it as extra income, or they participate in a Dividend Reinvestment Plan (DRIP). A Dividend Reinvestment Plan is a share purchase plan offered by companies that allows investors to reinvest their cash dividends to buy additional shares. A plan such as this can have significant long-term advantages, as it allows investors to maximize their