Yeah, if your broker allows you to reinvest dividends into partial shares, the amount of dividends you receive will be based on your total shares. Let's say you have 2 shares and receive 0.05 more shares as a result of a 10cent dividend paid on 2 shares (20 cents). The next quarter you would receive (2.05*0.10)= .205 cents, possible rounded up or down. Every time you add shares and own them on the dividend Ex-Date you will receive dividends on that.

Stocks you buy with dividends also pay dividend themselves.

These stock purchase plans are called DRIPs--dividend reinvestment plans.

Yahoo Answers Community,

Do stock dividends pay dividends? Let's say I invest in a stock that pays dividends at $.10 a share each quarter. Instead of cashing out I re-invest those cents to buy more of the same stock. Will those dividends that I purchased stock with, pay dividends in the future?

"Let's say this is a bull market & the stock continues to pay the same dividend for a period of 10 yrs."