What is a dividend reinvestment plan? Explain the advantages of a dividend reinvestment plan to the firm

Question:

What is a reinvestment plan? Explain the advantages of a reinvestment plan to the firm and to shareholders.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...