What are dividend reinvestment plans?

Answer by  Gambert4 (22)

A dividend reinvestment plan, also known as a DRIP, encourages long term investment. It is offered by a company with stock options. Ususally, you receive your dividens as cash, however a DRIP automatically reinvests your cash dividends to buy more stock options. If dividends do not equal share price, they will still be reinvested for partial share ownership.

Answer by  Cecilia (2828)

Dividend ReInvestment Plans also know as DRIP are a system where your dividends from a certain stock are used to buy more stock in that company instead of being sent to you as cash. Most people use this system because it's a great way to grow your portfolio.