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Bondholders Could Use Dividend Reinvestment, Too


Readers Report

BONDHOLDERS COULD USE DIVIDEND REINVESTMENT, TOO

Your article "Buying stocks like clockwork" (Personal Business, Jan. 16) describes some innovative ways investors can make periodic, automatic investments in stocks or mutual-fund shares. For common shareholders, especially of the long-term variety, dividend reinvestment plans, inelegantly called DRIPs, provide an easy, low-cost way to buy more shares, dollar average, and save, rather than spend, their dividends.

For issuers, DRIPs provide low-cost equity capital and increased shareholder "commitment." Since DRIPs do these wonderful things, why not expand their benefits to the too-often-forgotten investor--the bondholder? Why doesn't some bold company give its bondholders the ability to invest their interest payment in its shares? Let's have D/IRIPs--Dividend/Interest Reinvestment Plans.

William T. Dolan

Minneapolis


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