DRIP-Dividend Reinvestment Plan

A plan offered by some corporations to allow investors to reinvest their cash dividends into the company’s stock by purchasing additional shares in the company’s stock, usually at a signficant discount and commission free.

This may be an excellent way for investors to accumulate a position in blue chip company. However, investor caveat and due diligence must be applied to see whether or not the company is worthy of investment in the first place.