Sunday, 4 February 2018

Distribution Re-Investment Plan (DRIP)

Note that there exists an optimum unitsto opt to receive distribution in new units. Take the example of First REIT, which has a recent distribution of ($0.0008 + $0.0112 + $0.095) per unit, and allows unit holder to re-invest the units at DRIP price of $1.3656.

The plot below shows the actual DRIP price vs the number of units opted to re-invest, assuming a unitholder hold around 10,000 units. In the example below, the optimum units to re-invest is 8780 units, at an actual DRIP price of $1.3679.

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