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| Hi Thud. Reading your OP and your follow up question I think maybe the hang up is it sounds like you think the company has to maintain the stocks issued at the 1M traded. Sorry if I read that wrong, but this is not the case. In your example, they may have 1M shares being traded at the time, but may be able to issue many times more than that, say 10M shares. When a company wants to raise capital they can borrow money or choose to issue new stock.
In your example with 1M shares being traded on the DJ and 5000 shareholders each getting $500 dividend and want to put it through a DRIP: the company would pay out $2,500,000 in dividends. The company would receive $2,500,000 in capital sales by issuing new stock of $50/share X 50,000 shares. Now the amount of stock traded on the DJ is 1,050,000. The company's inventory on unsold stock would be reduced by 50,000.
DRIPs or employee stock purchase programs usually don't have a big push or pull on the price. It is more news most of the time when an inside manager wants to sell their stocks vs. how many they can buy under a stock option program. Buybacks also effect the amount of stock issued, then it goes back on the company's balance sheet. Stock splits can also change the amount of stock in circulation. In a 3 for 2 split the company give you 3 shares for every 2 you own.
Take care and happy investing.
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Stocks, stock prices and dividends NOVICE question.
