Agency costs of managerial discretion are one of the few costs that are not exacerbated when a firm is under financial distress.

Name: Agency costs of managerial discretion are one of the few costs that are not exacerbated when a firm is under financial distress.
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Question

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Agency costs of managerial discretion often increase during financial distress as managers may pursue personal objectives over shareholders' interests, potentially exacerbating the firm's financial difficulties.

Agency Costs of Managerial Discretion Are One of the Few