Agency costs reflect all of the following EXCEPT ____ costs.

Question

Quizplus · Accepted Answer

Agency costs include monitoring costs to ensure that managers are acting in the best interest of the company and enforcement costs to discourage managers from taking actions that go against the company's goals. Incentive costs refer to the costs of providing managers with motivation to act in the company's best interest. Opportunity costs, however, do not directly relate to the costs associated with agency problems. Opportunity costs refer to the potential benefits that are forgone when choosing one option over another.

Agency Costs Reflect All of the Following EXCEPT ____ Costs