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Agency Cost
The costs arising from conflict of interest between principals (owners) and agents (managers), including monitoring expenditures and the costs of structuring operations to minimize issues.
Marginal Cost
The cost incurred by producing one additional unit of a product or service.
Claim Dilution
The reduction in the likelihood of recovery or the value of each creditor’s claim as a result of an increase in the number of claimants or claims against the same debtor or asset.
Secured Loan
A loan that is backed by collateral, providing the lender with assurance that the loan will be repaid.
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