Dividend re-investment plan (DRIP)

A plan under which shareholders can elect to receive shares instead of receiving a cash dividend (www.practicallaw.com/A34897). Once the shareholders elect to take shares, the company’s registrars will arrange for the shares to be purchased on the market. Brokers’ costs and stamp duty (www.practicallaw.com/A36997) or stamp duty reserve tax (www.practicallaw.com/A36999) are met by the participants in the scheme by deducting these amounts from the dividend payment before the shares are purchased.

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