Companies run DRP for a few reasons
1. Cheap capital from shareholder
2. Allow holder who wish to stay in long term and grow their shareholding in the stock
without incur brokerage
1. Cheap capital from shareholder
2. Allow holder who wish to stay in long term and grow their shareholding in the stock
without incur brokerage
Companies may suspend DRP
1. they think the stock is trading too cheaply and don’t want DRP to over diluting existing shareholder.
2. They got too much cash and don’t want any more capital and at the same time
protecting shareholder from dilution.
CCP did this last year…they suspend DRP, they got too much cash, they rather
hand out more in dividend
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