Examine agency costs and different ways to minimize them in order to maximize shareholder value. As you discovered in this module’s reading, agency costs are the result of managing the relationship...

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Examine agency costs and different ways to minimize them in order to maximize shareholder value.


As you discovered in this module’s reading, agency costs are the result of managing the relationship and resolving differences between the shareholders and management, especially when there is a conflict of interest. Craft a discussion post in which you suggest effective ways to minimize agency costs, other than compliance with regulatory agencies.


2 references; 1 reference from the book Ch. 13: https://mbsdirect.vitalsource.com/#/books/9781119380733/cfi/6/18!/4/2/2/2/6@0:0


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Answered Same DayApr 30, 2021

Answer To: Examine agency costs and different ways to minimize them in order to maximize shareholder value. As...

Ayush answered on Apr 30 2021
146 Votes
Agency cost arises due to a conflict of interest between management and shareholders. In smaller companies, shareholders may get to choose management who act on their behalf and not promote their self-interest. But, in larger companies, the common shareholders have a small stake and therefore, negligible say in the company. Thus, the Board of Directors role become important and they take...
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