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. Bloomberg Financial Dictionary
signaling approach (on dividend policy)
The argument that dividend changes are important signals to investors about changes in management's expectation about future earnings. Bloomberg Financial Dictionary

Financial and business terms. 2012.

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