Agency costs are the tangible and intangible revenues expenses borne by shareholders because of the actual or potential self-serving actions of managersgenerated by shareholders because of the actual or potential selfless actions of managers; and agency coststhey include only imexplicit , out-of-pocket (no cash is spent explicitly) expenses.

Question

Quizplus · Accepted Answer

The statement is incorrect. Agency costs include both explicit (out-of-pocket) and implicit (not directly measurable) expenses incurred by shareholders due to the actions or potential actions of managers, whether self-serving or selfless.

Agency Costs Are the Tangible and Intangible Revenues Expenses Borne