Dividend reinvestment refers to a policy by which a company allows its shareholders to use their cash dividends to purchase additional shares in the company. This means that instead of receiving cash payments, shareholders can choose to have their dividends used to buy more stocks, thereby increasing their holdings in the company. Dividend reinvestment plans (DRIPs) are a popular way for companies to provide this service to their investors. This method allows individuals to automatically purchase additional shares of stock without having to pay brokerage fees or other transaction costs each time new shares are purchased. It also helps in reducing the overall cost of ownership and encouraging long-term shareholding, which can benefit both the company and its shareholders.