low-cost signalling

Examples of low-cost signalling in the following topics:

• Predatory Pricing

  • Predatory pricing is the practice of selling a product or service at a very low price, intending to drive competitors out of the market.
  • Economists argue that the competitors (the 'prey') know that the predator cannot sustain low prices forever, so it is essentially a game of chicken.
  • Prey may not see it as a game of chicken, if they truly believe that the prey has actually found a way to achieve a lower cost of production than them.
  • This is known as 'low-cost signalling'.
  • Low oil prices in the 1990's were considered a case of alleged predatory pricing.

• Forms of Signaling

  • There are four categories of chemical signaling found in multicellular organisms: paracrine signaling, endocrine signaling, autocrine signaling, and direct signaling across gap junctions .
  • A synaptic signal is a chemical signal that travels between nerve cells.
  • Because of their form of transport, hormones get diluted and are present in low concentrations when they act on their target cells.
  • In chemical signaling, a cell may target itself (autocrine signaling), a cell connected by gap junctions, a nearby cell (paracrine signaling), or a distant cell (endocrine signaling).
  • Paracrine signaling acts on nearby cells, endocrine signaling uses the circulatory system to transport ligands, and autocrine signaling acts on the signaling cell.

• Information Costs and Bond Prices

  • We include these costs in the bond's market price and interest rate, and they raise the cost of borrowing.
  • We can use the demand and supply analysis to create two markets for the high and low information- cost bond markets.
  • Investors pay a greater cost to acquire information for the high information cost bonds.
  • Thus, investors are attracted to the low-information cost bonds, boosting their demand for low information cost bonds, increasing the market price and decreasing market interest rate.
  • Therefore, low-information-cost bonds pay a lower interest rate.

• Signaling Consideration

  • That party would then interpret the signal and adjust its purchasing behavior accordingly -- usually by offering a higher or lower price than if the signal had not been received.
  • A basic example of signaling is that of a student to a potential employer.
  • Therefore, investors generally view all capital structure decisions as some sort of signal.
  • Conversely, a company with strong solvency and good prospects would generally be able to obtain funds through debt, which would generally take on lower costs of capital than issuing new equity.
  • Explain how a company's attempts at signaling can affect its capital structure

• Expected Dividends, No Growth

  • If clienteles exist for particular patterns of dividend payments, a firm may be able to maximize its stock price and minimize its cost of capital by catering to a particular clientele.
  • As examples, such securities may be stock in public companies that have high dividend yields, low price-to-earning multiples, or have low price-to-book ratios.
  • Thus, high dividends and low reinvestment of retained earnings can signal an appealing value stock to an investor.

• Bankruptcy Considerations

  • If potential creditors sense that bankruptcy could be likely firms will have a harder time acquiring financing and even if they do, it will probably come at a high interest rate that significantly increases the cost of debt.
  • These firms will have to rely heavily on equity, which once again can be seen as a negative signal about the firm's current state.
  • This places a high cost on raising capital, with potential for low returns.
  • Describe how the risk of a corporate bankruptcy can influence a company's cost of capital

• Just-in-Time Technique

  • Just in time (JIT) is a production strategy that strives to reduce in-process inventory and carrying costs in a manufacturing system.
  • Just in time (JIT) is a production strategy striving to improve a business return on investment by reducing in-process inventory and associated carrying costs.
  • To meet JIT objectives, the process relies on signals or Kanban between different points in the process.
  • Kanban are usually "tickets" but can be simple visual signals, like the presence or absence of a part on a shelf.
  • In addition, very low stock levels means shipments of the same part can come in several times per day.

• Inventory Techniques

  • This expression describes the principle of a queue processing technique or servicing conflicting demands by ordering process by first come, first served (FCFS) behavior, where the persons leave the queue in the order they arrive, or waiting one's turn at a traffic control signal.
  • There are two commonly used average cost methods: Simple weighted average cost method and moving average cost method.
  • This gives a Weighted Average Cost per Unit.
  • Finally, this amount is multiplied by Weighted Average Cost per Unit to give an estimate of ending inventory cost.
  • Each time, purchase costs are added to beginning inventory cost to get Cost of Current Inventory.

• Signal Strength

  • A six-membered ring intramolecular hydrogen bond in the latter compound is in part responsible for its low field shift, and will be shown by clicking on the hydroxyl proton.
  • iv) Intramolecular hydrogen bonds, especially those defining a six-membered ring, generally display a very low-field proton resonance.
  • Note that the average of the expected carboxylic acid signal (ca. 12 ) and the alcohol signal (ca. 2 ) is 7.
  • Rapid exchange of these hydrogens with heavy water, as noted above, would cause the low field signal to disappear.
  • In particular the low field resonance of hydrogens bonded to double bond or aromatic ring carbons is puzzling, as is the very low field signal from aldehyde hydrogens.

• Methods of Intracellular Signaling

  • The induction of a signaling pathway depends on the modification of a cellular component by an enzyme.
  • They are small molecules that propagate a signal after it has been initiated by the binding of the signaling molecule to the receptor.
  • The free concentration of calcium ions (Ca2+) within a cell is very low because ion pumps in the plasma membrane continuously use adenosine-5'-triphosphate (ATP) to remove it.
  • Phosphatidylinositol (PI) is the main phospholipid that plays a role in cellular signaling.
  • Explain how the binding of a ligand initiates signal transduction throughout a cell