Explain how dividend reinvestment schemes operate

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Reference no: EM132606621

It is common for corporations in Australia and other market economy countries to offer shareholders a dividend reinvestment scheme.

Question 1: Explain how dividend reinvestment schemes operate and discuss their significance as a source of equity funding.

Question 2: Discuss the advantages of a dividend reinvestment scheme from the point of view of the corporation and shareholders.

Question 3: Under what circumstances might such schemes prove to be unattractive to the dividend-paying company?

Reference no: EM132606621

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