Question
Agency costs may arise from conflicts of interest between the parties forming the contractual relationships of the firm. For example, management may make decisions that
Agency costs may arise from conflicts of interest between the parties forming the contractual relationships of the firm. For example, management may make decisions that transfer wealth from debtors to shareholders. Explain the following three sources of potential conflict: i. Claim dilution [3 marks] ii. Dividend payout [3 marks] iii. Asset substitution [3 marks]
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The Analysis And Use Of Financial Statements
Authors: Gerald I. White, Ashwinpaul C. Sondhi, Haim D. Fried
2nd Edition
0471111864, 978-0471111863
