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    Advantages of dividend reinvestment plans to the corporation

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    What advantages to the corporation and the stockholder do dividend reinvestment plans offer?

    © BrainMass Inc. brainmass.com October 9, 2019, 9:35 pm ad1c9bdddf
    https://brainmass.com/business/accounting-for-corporations/advantages-of-dividend-reinvestment-plans-to-the-corporation-190786

    Solution Preview

    Since, dividends have a tax disadvantage i.e. marginal rate of tax on dividends is much higher than capital gain tax, the dividend reinvestment plan will help the stockholders in reducing ...

    Solution Summary

    This post evaluates the dividend reinvestment policies in terms of their value to the investors. The advantages and disadvantages of this management action is evaluated under perfect markets as well as in imperfect markets.

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