Dividend Reinvestment Plan (DRIP) | Practical Law

Dividend Reinvestment Plan (DRIP) | Practical Law

Dividend Reinvestment Plan (DRIP)

Dividend Reinvestment Plan (DRIP)

Practical Law Glossary Item w-003-1109 (Approx. 2 pages)

Glossary

Dividend Reinvestment Plan (DRIP)

A method for a reporting company to offer its shareholders a way to buy additional equity securities from the company. The DRIP reinvests all or partial cash dividends to be paid to the shareholder into more equity securities. The shares issued under the DRIP may be common stock or other equity securities. The equity securities may also have rights attached to them permitting the shareholder to purchase additional securities of the company.