Which of the following statements regarding dividend reinvestment plans (DRIPs)is true?

Question

Quizplus · Accepted Answer

Option A is false because taxes on dividend reinvestment plans are deferred until the shares are sold.
Option B is true because some companies offer discounts on shares purchased through their DRIPs, making them cheaper than market prices.
Option C is also true because many DRIPs allow shareholders to reinvest their dividends without paying brokerage fees. Many DRIPs offer the opportunity for shareholders to purchase shares at a lower cost than the current market price, which is beneficial for long-term investors. Additionally, DRIPs usually allow shareholders to avoid paying brokerage fees, which can save them money in the long run. However, shareholders still must pay taxes on the dividends, whether they are reinvested through a DRIP or received as a cash payment.

Which of the Following Statements Regarding Dividend Reinvestment Plans (DRIPs)is