1. D ividend R e I nvestment P lans & D irect I nvestment P lans

2. Investors can purchase shares of stock directly from the company Shares can be purchased in small amounts

3. investor needs to own at least one share to enroll in the plan the dividends are automatically reinvested to purchase more shares at no fee shareholders can buy more stock through the plan with little or no fee (sometimes in amounts as small as $10)

4. requires only a small initial investment & stock can be purchased in small amounts some DRIPS offer stocks at a discount of 3-5% no broker commission, low cost companies that offer DRIPS are generally large & well- established, so there is less volatility in stock price small, regular investments are less stressful for cautious investors relatively low maintenance

5. low cost access to capital DRIP investors are usually stable, long-term shareholders which lessens the volatility of the stock the steady flow of reinvested capital helps to stabilize normal market fluctuations many companies already have employee stock option distribution channels already established, which have been expanded to sell stock directly to investors

6. not an immediate purchase/sale, takes more time and effort to buy or sell shares because the transaction must be processed through the company; there is more time for price fluctuations between order and execution brokers do not widely promote DRIPS because there is no commission involved; more investor responsibility can be confusing with taxation because the reinvested dividends are considered taxable income and must be accounted for

8. investor must purchase one share of stock, with the certificate issued in his/her name purchase thru brokerage or purchase directly from company if the company has a DIP enroll in DRIP, either through the company directly or through a third-party transfer agent company Contact investor relations of the specific company to learn the individual program details