However, if the dividend payments are reinvested
in additional shares of stock, then the total cost and total number of shares change after each new dividend reinvestment, and you must recalculate your new adjusted cost base.
With a DRIP, you can reinvest the dividends that you earn back into the company that you own stock in, through the purchase
of additional shares of stock in the company.
Analysts believed that Trustreet could not engage in further growth without selling some of its properties or
selling additional shares of its stock — something the company was reluctant to do.
In other words, when one of your stocks pays a dividend, instead of receiving a check, or cash appearing in your brokerage account, the dividend is automatically used to
buy additional shares of that stock.
In the instance of a stock dividend, the company pays out
additional shares of stock to shareholders instead of paying cash.
Underwriters will also receive a 30 - day option to purchase up to 600,000
additional shares of stock to cover over-allotments.