I’m planning to buy RHB (between 5k to 10k units) but something that’s given me a pause is the Dividend Reinvestment Plan. So far, I’ve not purchased any stocks with Dividend Reinvestment Plans. I see that most banks have this option now.

I’m hoping to understand more about Dividend Reinvestment Plans:

1) Is it fair to say it’s a no brainer? You’re buying MORE of the business (though if everyone exercises their entitlement, proportionately there will be no difference) at below market value. If you don’t buy, your proportionate ownership of the company drops.

2) Is there a scenario where it makes more sense to not elect for reinvestment?

3) How complicated is it? Can it be done securely online? What if you submit the hard copy form but it reaches delayed or gets lost in mail?

4) Is Dividend Reinvestment Plan fair for retail investors?

5) Anything to take note of?

6) If I subscribe and get some odd lots, can they be made even by getting more odd lots next year? Example 63 shares from Dividend Reinvestment Plan this year and 37 next year, does it become 1 round lot?

Yes definitely I'm asking all these questions as a potential long-term investor.

This post has been edited by contestchris: Jan 21 2023, 12:19 AM

Nonsense, DRP has no relation to treasury shares.

I mean there's nothing wrong in doing that either. It's the same thing end of the day.

BTW what companies do DRP with treasury shares? Can share example?