Some brokerages will reinvest dividends in additional shares for you for free -- but others charge for this service, so watch out.
Plans offered by many corporations for the reinvestment of dividends, sometimes at a discount from market price, on the dividend payment date. Many DRP's also allow the investment of additional cash from the shareholder. The DRP is usually administered by the company without charges to the holder.
Plans offered whereby the company reinvests a shareholder’s dividends, sometimes at a discount from market price, in additional shares of common stock. This is usually administered with no brokerage charge to the shareholder.