Which of the following are true concerning dividend reinvestment plans?
1) taxes are deferred
2) they offer stockholders a convenient means to save
3) the firm may pay the brokerage and other fees associated with the plans
A)1 and 2
B)1 and 3
C)2 and 3
D)1, 2, and 3

Question

Which of the following are true concerning dividend reinvestment plans?
​1) taxes are deferred
2) they offer stockholders a convenient means to save
3) the firm may pay the brokerage and other fees associated with the plans
A)​1 and 2
B)​1 and 3
C)​2 and 3
D)​1, 2, and 3

Quizplus · Accepted Answer

2) Dividend reinvestment plans offer stockholders a convenient way to reinvest dividends into additional shares of the company, often without having to pay brokerage fees. 3) Firms often cover the brokerage and other fees associated with these plans, making them an attractive option for investors. Taxes on dividends are not deferred; they are typically taxed in the year they are received, even if they are reinvested.

Which of the Following Are True Concerning Dividend Reinvestment Plans