Desde Investopedia

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Dividend Signaling Dividend signaling is a theory suggesting that when a company announces an increase in dividend payouts, it is an indication it possesses positive future prospects. The thought behind this theory is directly tied to game theory; managers with good investment potential are more likely to signal. While the concept of dividend signaling has been widely contested, the theory is still a key concept utilized by proponents of inefficient markets.

Breaking it Down: Because the dividend signaling theory has been treated with a skeptical eye by analysts and investors, regular testing of the theory has been performed. On... Read More