Implicit Agency Costs

question 61

Multiple Choice

Implicit agency costs:

• A)may will not harm shareholders
• B)do not have a direct expense associated with them
• C)may include restrictive covenants
• D)all the above
• E)none of the above

---

Definitions:

Present Value

The present worth of a future amount of money or series of cash flows when a particular return rate is applied.

Semiannually

Occurring twice a year, typically every six months, often used in the context of interest or dividend payment schedules or reporting periods.

Annual Interest Rate

The percentage rate charged or paid over a year for borrowing or saving money.

Present Value

The current value of a future amount of money or stream of cash flows given a specified rate of return, used in discounting to assess investment opportunities.