What is Dividend Signaling

Definition: This is a theory which asserts that announcement of increased dividend payments by a company gives strong signals about the bright future prospects of the company.

Description: An announcement of an increase in dividend pay out is taken very positively in the market and helps building a very positive image of the company regarding the growth prospects and stability in the future.

Generally, dividend signaling is done by the company when it changes the amount of dividend to be paid to shareholders.

Know More: Block Deal Definition, Patwari Definition, Spot Price Definition, Strike Price Definition, Recessionary Gap Definition, Exclusions Definition, Due Date Rate Definition, Wage Drift Definition, Equity Theory Definition, Renewal Premium Definition

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