Business and Personal Finance Dictionary

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• DIVIDEND REINVESTMENT PLAN (DRIP)
  
  Many publicly held companies allow shareholders to reinvest their dividends in the company's stock as well as purchase additional shares of the stock through dividend reinvestment plans, or DRIPs. Enrolling in a DRIP enables you to build your investment gradually, taking advantage of dollar cost averaging and usually paying only a minimal transaction fee for each purchase. Many DRIPs will also buy back shares at any time you want to sell, in most cases for a minimal sales charge.
  
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