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List examples of agency costs which are incurred by shareholders in trying to minimize agency problems

Marketing Dec 28, 2020

List examples of agency costs which are incurred by shareholders in trying to minimize agency problems.

Expert Solution

In order to minimize agency problems, shareholders incur a variety of costs, including those noted below.

- Incentive compensation expense designed to motivate management to act in a way the best serves shareholders

- Travel, lodging, and other administrative costs to facilitate board meetings

- Consulting expense to obtain independent perspectives on important strategic matters

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