Agency costs include all of the following EXCEPT
A) management reports to stockholders.
B) performance incentives paid to managers.
C) the cost of monitoring management behavior.
D) purchasing insurance against management misconduct.

Question

Quizplus · Accepted Answer

The other three choices (B, C, and D) all relate to the expenses associated with managing agency costs. However, management reporting to stockholders is not a cost, but rather a responsibility of management.

Agency Costs Include All of the Following EXCEPT