Which of the following statements provides the best description of agency cost in a situation where an owner of a firm has entered into an employment contract with the manager of the firm? The agency cost of a contract is the manager's total annual compensation as a percentage of the market value of assets plus the book value of debt. Agency cost is the amount by which the owner's utility from the contract is less than the owner's utility for the first-best contract. The agency cost of a contract is the proportion of the manager's total compensation as a percentage of the firm's revenues. The agency cost of a contract equals the manager's reservation utility