What is a DRIP as it applies to stocks? Suppose you own 5,000 shares of Rough Rider Disposal Inc. and the firm has a DRIP program. Rough Rider pays dividends at the rate of $1.50 per share per year and has a current price of $57 per share. How many additional shares of stock can you receive if you elect to receive your dividends via the DRIP option? Why is this an advantage over purchasing the stock on the open market?
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