Agency Costs

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August 31, 2024 4 min read Definitions
Agency Relationship: Exploring the Principal-Agent Dynamic
Economics Finance Business Agency Relationship Agency Theory Principal-Agent Problem Agency Costs Goal Congruency
An in-depth analysis of the principal-agent relationship, including its costs, the role of monitoring and bonding, residual losses, and the relevance of agency theory in modern economic and financial systems.
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August 31, 2024 4 min read Definitions
Agency Theory: Understanding Principal-Agent Relationships
Economics Finance Management Principal-Agent Relationship Asymmetric Information Incentive Structures Risk Allocation Agency Costs
Agency Theory delves into the contractual relationship between a principal and an agent, analyzing the complexities arising from asymmetric information and differing objectives. It has wide applications in economics, corporate governance, and public administration.
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August 31, 2024 4 min read Definitions
Free Cash Flow Problem: Definition and Implications
Finance Economics Free Cash Flow Corporate Finance Shareholder Value Resource Allocation Agency Costs
The Free Cash Flow Problem arises when firms waste their free cash flow on non-value-adding projects, leading to potentially reduced shareholder value and inefficient resource allocation.
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