Signal

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Signal

To convey information through a firm's actions. The more costly it is to provide a signal, the more credibility it has. For example, to call a press conference and tell everyone that the firm's prospects have improved is less effective than saying the same thing and raising the dividend.

Signal

An indication of a company's health and/or actions. Signaling a certain state or action may cause a company's stock to rise or fall in price. Generally speaking, the more money a signal costs a company to make, the stronger the signal is thought to be. For example, a company may make a statement indicating financial distress, but reducing its dividends is thought to be a stronger signal.

signal

To provide information to. For example, an unexpected dividend increase may signal investors that a firm's directors are more optimistic about future profits than previously thought. Likewise, the announcement of a new equity issue may signal investors that directors consider a firm's stock to be fully valued.
References in classic literature ?
he repeated loudly, as the captain signaled him to be more soft spoken.
His spirits rose with every step, and when he reached Trafalgar Square, blazing in the sun, with its fountains playing and its column reaching up into the bright air, he signaled to a hansom, and, before he knew what he was about, told the driver to go to Bedford Square by way of the British Museum.
The distant report of a gun came from the ship in the offing, and signaled the return to England and to home.