A root cause of firm agency costs is

Question

Quizplus · Accepted Answer

The root cause of firm agency costs is a manager's concern for his personal well-being, which can lead to decisions that benefit himself rather than the firm and its shareholders. This concern may manifest in behaviors such as shirking responsibilities, engaging in self-dealing or pursuing projects that may benefit the manager but not the firm. Therefore, reducing agency costs requires aligning the interests of managers with those of shareholders.

A Root Cause of Firm Agency Costs Is