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Definition of Agency theory - Finance dictionary
        

Agency theory (See Chapters 30 and 32 of the Vernimmen)

Agency theory says that a company is not a single, unified entity. Agency theory calls into question the claim that all of the stakeholders in the company (shareholders, managers, and creditors) have a single goal – value creation. Agency theory shows how, on the contrary, their interests may differ and some decisions (related to borrowing for example) or how products (stock options) come out of attempts to achieve convergence between the interests of managers and shareholders to protect creditors. Agency theory analyses the consequences of certain financial decisions in terms of risk, profitability and, more generally, the interests of the various parties. Agency theory is the intellectual basis of corporate governance. See also agency costs.

Agency theory (See Chapters 30 and 32 of the Vernimmen)

Agency theory says that a company is not a single, unified entity. Agency theory calls into question the claim that all of the stakeholders in the company (shareholders, managers, and creditors) have a single goal – value creation. Agency theory shows how, on the contrary, their interests may differ and some decisions (related to borrowing for example) or how products (stock options) come out of attempts to achieve convergence between the interests of managers and shareholders to protect creditors. Agency theory analyses the consequences of certain financial decisions in terms of risk, profitability and, more generally, the interests of the various parties. Agency theory is the intellectual basis of corporate governance. See also agency costs.

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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Definitions of terms begining with the same letter as "Agency theory" :

ABS
ADR
ANAV
APE
APT
APV
Abandonment risk
Accelerated book-building
Accelerated depreciation
Accelerated share repurchase
Account balancing
Accounting criteria of value creation
Accounting currency risk
Accounting procedures with an impact on earnings
Accounts payable
Accounts receivable
Accretion
Accruals
Accrued expense
Accrued income
Acid test ratio
Acquisitions
Adjustable rate preference shares
Adjustable-rate debt security
Adjusted Net Asset Value
Adjusted present value, APV
Administrative synergy
Advance dividend
Affirmative covenant
Agency costs
Agency theory
Agent bank
Agent fee
Agreement in principle
All-in cost
All-share transaction
Alliance
Allocative efficiency
Alpha
Also called order book.
Alternative management
American Depositary Receipt
American option
Amortisation
Amortisation of the loan
Annual Premium Equivalent
Annual effective interest rate
Annuity
Annuity factor
Apparent dilution
Appraisal clause
Arbitrage
Arbitrage pricing theory, APT
Arranger
Arranging the deal
Asset backed commercial paper
Asset backed securities
Asset beta
Asset contribution
Asset coverage
Asset turnover
Assets
Associate
Associated undertaking
Asymmetry - option
Asymmetry - shareholder / creditor
Asymmetry – issuer/investor
At the money
Atypical silent partner
Auction
Auction clause
Average life of a bond

Agency theory (See Chapters 30 and 32 of the Vernimmen)

Agency theory says that a company is not a single, unified entity. Agency theory calls into question the claim that all of the stakeholders in the company (shareholders, managers, and creditors) have a single goal – value creation. Agency theory shows how, on the contrary, their interests may differ and some decisions (related to borrowing for example) or how products (stock options) come out of attempts to achieve convergence between the interests of managers and shareholders to protect creditors. Agency theory analyses the consequences of certain financial decisions in terms of risk, profitability and, more generally, the interests of the various parties. Agency theory is the intellectual basis of corporate governance. See also agency costs.