Question 2

Jensen, M. C. and W. J. Meckling (1976), Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure, Journal of Financial Economics, 3 (4): 305-360.

(If you are unable to find this article in the library, you may get it by making a simple google search from other sources.)

By reading the article in Question 2 above and based on your own research, please describe the following:

a. Agency relationship

b. Agency problem

c. Agency cost