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Stocks, stock prices and dividends NOVICE question.
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Thud
Posted 3/26/2020 15:42 (#8140794)
Subject: Stocks, stock prices and dividends NOVICE question.


Essex County, extreme SW Ontario,
I'm not sure how to ask this so bear with me.. How are stock prices set? Simple right? I get supply and demand etc. In my example lets say that company "A" has 1 million shares traded on the DJ. Lets assume that stock is priced at $10/share and reliably pays a dividend of 5% on those shares. Now I as an investor own 1000 shares, at an average price of $10 (price is irrelevant for this question.). Now through my broker I have the account set up to re-invest any dividends from the stock, back into the company. So my 1000 shares give me $500in dividends on a yearly basis. Ignoring the tax side of this... that $500 would allow me to purchase an additional 50 shares per year. So now my question. If the 1million shares are already spoken for, how do I buy the additional 50 shares???( its done automatically ) What effect does this have on share price? Probably a simple answer but I'm a novice investor and up to this point I've relied on my advisor/broker for this type of thing.
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