Hi
Is it true that agency cost theory is applicable in all directions when it comes to reducing costs between company and shareholders, creditors?
Txs
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Agency costs
Replies (1)
Agency cost theory is not a universal "all-directional" tool for cost reduction; it is a specialized framework for addressing conflicts of interest between principals and their agents (e.g., shareholders vs. managers) and between competing claimants (e.g., shareholders vs. creditors). For broader stakeholder relationships, other frameworks like Stakeholder Theory are often utilized to manage diverse interests.
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