Which of the following statements is NOT a possible benefit of dividend reinvestment programs (DRPs)?
A) Owners of shares that pay dividends do not have to pay brokerage fees if they want to reinvest the proceeds.
B) A company will sell new shares normally at a discount of 2.5 - 10 per cent off the market price.
C) DRPs allow a company to preserve its cash flows and receive a low cost source of capital.
D) Shareholders who choose not to participate in the DRP will find that their proportional ownership is eroded over time.

Question

Quizplus · Accepted Answer

Shareholders who do not participate in DRPs may experience dilution of their ownership percentage, but this is not a benefit of DRPs.

Which of the Following Statements Is NOT a Possible Benefit