Dividend reinvestment plans (DRPs)are:

Question

Quizplus · Accepted Answer

DRPs are more popular under the dividend imputation tax system than under the classical tax system because they allow investors to avoid paying tax on the dividends they reinvest. DRPs are cheaper than private placements because they do not involve the payment of underwriting fees. DRPs are limited by the company's profits in their ability to raise capital because they can only issue new shares to the extent that they have retained earnings.

Dividend Reinvestment Plans (DRPs)are