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Rules for dividend reinvestment plans
As you know I've been doing a lot of reading and researching lately and today I stumbled across an article about the benefits of DRIP. All of which I understand and agree with, apart from this statement:
"The shares sold through the DRIP are taken out of the company's share reserve. DRIP shares cannot be sold on the market; when investors are ready to sell their DRIP shares, they must sell them back to the company that issued them at the current market price."
Is this correct? I was under the impression that shares achieved via DRIP were equal to all other shares and you could do what you liked with them eg: sell on the secondary market later if you chose to.
This was from a site called Investopedia which would appear to be US based so maybe things are different over there. I hope so.
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Member
Yes Investopedia are American. DRP shares are equal to ordinary shares and you can sell them with same. I have never HAD to sell mine back to the company - they just go somewhere else along with the ordinary.
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Originally Posted by stones
Yes Investopedia are American. DRP shares are equal to ordinary shares and you can sell them with same. I have never HAD to sell mine back to the company - they just go somewhere else along with the ordinary.
Cool. Thanks!
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