Agency costs can be reduced by:
i.monitoring managers' efforts; II)monitoring managers' actions; III)intervening when managers veer off-course
A)I only
B)I and II only
C)I,II,and III only
D)III only

Question

Quizplus · Accepted Answer

All three options listed (monitoring managers' efforts, monitoring managers' actions, and intervening when managers veer off-course) are effective ways to reduce agency costs. By monitoring their efforts and actions, managers are more likely to stay on track and remain accountable. However, if they do veer off course, it is important to intervene in order to bring them back in line and prevent further losses due to agency costs. Therefore, options I, II, and III are all necessary for reducing agency costs.

Agency Costs Can Be Reduced By