Use the following statements to answer this question:
I.A DRIP is an investment plan that investors cannot choose to opt out from.
II.DRIPs and stock dividends are exactly the same thing.
A)I and II are correct.
B)I and II are incorrect.
C)I is correct and II is incorrect.
D)I is incorrect and II is correct.

Question

Quizplus · Accepted Answer

I is incorrect because a DRIP (Dividend Reinvestment Plan) is optional, allowing investors to reinvest their cash dividends into more shares or fractional shares of the underlying stock on the dividend payment date. II is incorrect because DRIPs and stock dividends are not the same; a DRIP is a plan that allows dividends to be reinvested, while stock dividends are a form of dividend payment made in additional shares rather than cash.

Use the Following Statements to Answer This Question