Automatic dividend reinvestment plans sometimes grant stockholders the privilege of purchasing additional shares at a discounted price.

Automatic Dividend Reinvestment

A feature that allows shareholders to automatically use their dividend payments to purchase additional shares of the stock, usually without a commission.

Additional Shares

Newly issued stock by a company, which increases the total number of shares outstanding and dilutes the ownership percentage of existing shareholders.

Discounted Price

A reduced price from the original selling price, often used to stimulate sales or clear inventory.