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An agency cost is an economic concept that refers to the costs associated with the relationship between a "principal" (an organization, person or group of persons), and an "agent". The agent is given powers to make decisions on behalf of the principal.
The basic theorem states that in the absence of taxes, bankruptcy costs, agency costs, and asymmetric information, and in an efficient market, the enterprise value of a firm is unaffected by how that firm is financed. [2] [unreliable source?] This is not to be confused with the value of the equity of the firm.
Transaction cost as a formal theory started in the late 1960s and early 1970s. [13] And refers to the "Costs of Market Transactions" in his seminal work, The Problem of Social Cost (1960). Arguably, transaction cost reasoning became most widely known through Oliver E. Williamson's Transaction Cost Economics. Today, transaction cost economics is ...
When ownership and control is divided within a company, agency costs arise. However agency costs decline if the ownership within the company increases as managers are responsible for a larger shares of these costs. On the other hand, giving ownership to a manager within a company may translate into greater voting power which makes the manager's ...
A company's earnings before interest, taxes, depreciation, and amortization (commonly abbreviated EBITDA, [1] pronounced / ˈ iː b ɪ t d ɑː,-b ə-, ˈ ɛ-/ [2]) is a measure of a company's profitability of the operating business only, thus before any effects of indebtedness, state-mandated payments, and costs required to maintain its asset base.
Exactly what homeowners insurance covers and which perils are named or excluded on the policy may change based on your policy type and carrier. However, you can generally expect standard home ...
The changes were prompted by large rises in litigation costs and the proliferation of ambulance chasing advertisements and claim farmers. [23] Following the introduction of contingent fees, the National Health Service had to pay out hundreds of millions of pounds in compensation for malpractice claims.
President Donald Trump said Tuesday that he wants the U.S. to take ownership of the Gaza Strip and redevelop it after Palestinians are resettled elsewhere. Earlier Tuesday, Trump’s Middle East ...