I'm having trouble understanding the concept of a dividend reinvestment.
Basically, my mother and I both have Disney stock (5 and 10 shares) and recently she decided to take the dividends earned through mines and put it towards dividend reinvestment instead of just getting a $3 check twice a year. Idk if she did the same.
I understand that the money goes into investing further into that Disney stock, but then I'm lost. Disney stock is in the $90 range so I don't understand how the dividend reimbursement plan further invests into that stock or whatever else its supposed to be doing.
>>1662420
in 30 years shill own 6 shares instead of 5.
>>1662420
You end up with fractional shares. The shares bought with the dividend are not from the exchange they're from the broker-dealer that setup the DRIP
>>1662420
>I understand that the money goes into investing further into that Disney stock, but then I'm lost. Disney stock is in the $90 range so I don't understand how the dividend reimbursement plan further invests into that stock or whatever else its supposed to be doing.
It would be a fraction of a share. So if you had a drip plan and you got $3 for a share that was $90 each, it would automatically convert into 0.033 DIS shares and be added to whatever you already have. So you'd be left with 5.033 or 10.033 DIS shares.
What's cool is that each subsequent time the interest compounds on itself over time. Fascinating shit desu
Welcome to a tax nightmare. You are fucked
>>1662512
obviously these shares are in a tax deferred account you fucking idiot mongoloid retard mouth breathing waste of space
>>1662420
>a $3 check
Kek, my bank charges $2.50/check. I got a $14.20 check from Church & Dwight last week. That makes $11.70. And I still have to pay fucking $2.13 of taxes.
>>1662512
>Although the dividends are not actually received by the shareholder, they still need to be reported as taxable income.
http://www.investopedia.com/terms/d/dividendreinvestmentplan.asp
Is it really that hard?
>>1663039
>Church & Dwight
What kind of shitty ass bank charges to deposit checks?
>>1663250
>What kind of shitty ass bank charges to deposit checks?
Arlington Country Bank
>>1663885
Find a credit union. You have a crappy bank.