AGENCY COSTS
\ˈe͡ɪd͡ʒənsi kˈɒsts], \ˈeɪdʒənsi kˈɒsts], \ˈeɪ_dʒ_ə_n_s_i k_ˈɒ_s_t_s]\
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Direct and indirect costs arising from the separation of ownership (i.e., COMMON STOCK shareholders) and control (i.e., DIRECTORS and managers) that ultimately lead to a reduction in ENTERPRISE VALUE. Agency costs can include the expenses associated with implementing processes for monitoring, reporting, and auditing.
By Henry Campbell Black
Word of the day
tinctura quininae ammoniata
- A preparation made by dissolving quinin sulphate in alcohol [Br. Ph.].