True, False, or Uncertain: Purchasing stock through a dividend reinvestment plan
(DRIP)allows investors to avoid paying taxes on their dividend income since they
never actually receive a check for it. Explain.

Question

Quizplus · Accepted Answer

Although the investor who reinvests his dividend income does not receive any cash, he still has to pay taxes on the amount he has reinvested.

True, False, or Uncertain: Purchasing Stock Through a Dividend Reinvestment