Why Companies Offer DSPs
Companies find they can raise capital at a lower cost using DSPs. By encouraging long-term shareholders from the retail sector, companies can not only sell shares cheaper, they can also balance the influence of institutional investors.
Institutional investors are large investors. They can include investment companies, mutual funds, insurance companies, pension funds, investment banks, or endowment funds. They often hold the majority of shares in many companies.
Another reason companies offer DSPs is to gain the support of Main Street America. Companies have found that shareholders with small amounts to invest who don’t have enough money to start a brokerage account remain loyal to the brand when they ...