• Although the investor never receives the cash, it is still treated as income to the investor. An investor may be allowed to make optional cash purchases of additional stock. — Abbr. DRIP; DRP.
dividend reinvestment plan
A stock-purchase program that allows investors to reinvest their dividends, and perhaps convert additional voluntary payments, into shares of the entity’s common stock, usu. with no sales charge, and sometimes at a discount from the stock’s market price.
