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  1. #1
    Guru justakiwi's Avatar
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    Default 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.

  2. #2
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    Default

    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.

  3. #3
    Guru justakiwi's Avatar
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    Default

    Quote Originally Posted by stones View Post
    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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