Signaling approach

Signaling approach

Notion that insiders in a firm have information that the market does not have, and that the choice of capital structure by insiders can signal information to outsiders and change the value of the firm. This theory is also called the asymmetric information approach.

Signaling approach (on dividend policy)

The argument that dividend changes are important signals to investors about changes in management's expectation about future earnings.

Signaling Approach on Dividend Policy

The belief that the amount per share a company pays in dividends is a strong indication of what the management believes about future earnings. For example, if the company pays $5 per share when it had paid $8 per share the previous time dividends were disbursed, shareholders may take this as a signal that the management believes that earnings will soon decline. Some investors may use the signaling approach on dividend policy as a means to determine whether to buy or sell a stock.
References in periodicals archive ?
Procurement Purchasing Products Used for Plant Maintenance Automatic Signaling Approach Trains at Level Crossings, Respectively, Railway Equipment, as Annexes to the Specifications.
The ROS-specific bioidentical signaling approach constitutes a new type of therapy, which encompasses numerous indications:
The collaboration encompasses research on diagnostics based on a network signaling approach to analyzing patients' tumors as well as clinical trial research.
In this context, studies like, the job market signaling (Spence, 1973 and 1974), the financial incentive signaling approach (Ross, 1977), the signaling hypothesis test on Harris and Raviv (1985) by Acharya (1988), and signaling in insurance market by Rothschild and Stiglitz (1976), are relevant.
The contract includes the design, supply and installation of all the vertical direction signs motorway sections Chasse sur Rhone / Bollene (A7), Bollene / Rognac (A7) Coudoux / Aix en Provence (A8) and the vertical signaling approach resting.