“…Signal hypothesis recommends how organizations ought to flag clients of monetary statements. Fauziah & Panggabean (2019), Pernamasari (2020), Restianti & Agustina (2018), Sunarto et al (2021 defines signals as actions taken by management that convey to investors how management views the prospects of the company.Information that a company is superior to another company can serve as a signal (Kurniawati, 2018;Siregar et al, 2018;Sutriasih et al, 2013;Tampubolon, 2016).Because information is basically a description, picture, or description that presents the company's viability, past, present, and future conditions, and their impact on the company, this information is very important for entrepreneurs and investors.All parties outside the company may also be influenced in their investment decisions by information released by the company.Signal theory is based on the assumption that managers and shareholders have different access to company information. Managers naturally have better information about the company than shareholders which leads to information asymmetry between managers and shareholders.…”