Dividend Reinvestment Plans
This is an excellent service ideal for busy shareholders. The idea is that cash dividends these shareholders will receive are immediately re-invested to buy new shares of the same company. This way, there is no lost time such as days or weeks before the dividend starts to earn again future dividends. It is similar to the concept of interest compounding with regards to bank deposits where the interest earned on the deposit is left in the account to earn more interest. This way, the investments, whether in the bank account or in shares of a company, are maximised. Different classes of shares are subject to different tax rates. It is important that an investor informs the stock registrar what to do with these dividend shares and designate a bank or stockbroker to receive these shares from the stock transfer agent.
investors on their conference