[masraum]

Originally Posted by Tidybuoy

To make my original post more clear, I have two examples below:

1) If I own Prudential. Under the DRIP program, I get a dividend from Prudential on July 31st. Let's say that Prudential stock is trading at $123 per share today but for unknown reasons spikes to $130 on July 30th. When I get my dividend on the 30th, I will get 15 shares at $130. One week later, the stock reverts to $125. I get fewer shares on the 31st than I would have if the stock stayed at $123.

But, didn't we decide that if your DRIP buys you stocks, that instead of paying $130, that you are getting a discount. And I found one website that said that most DRIP give a 3-5% discount, so if Prudential's DRIP fits the example of the website, you'd have paid somewhere between $123.50 and $126.10.

Of course, the DRIP doesn't allow you to put that money anywhere else.