What is Agency Cost and who bears them? An agency cost is a cost of reducing agency conflict among the owner/ principal (stockholders) and managers (agent). We can also say the cost which is bears by the company Continue Reading
Conflict Between Shareholders and Creditors
What kind of agency conflict between shareholders and creditors may exist? A conflict between shareholders and creditors is common for the company which uses debt capital to form an optimum capital structure. Agency relation exists when one party Continue Reading
Agency Conflict
What is Agency Conflict? Agency conflict is a common problem we face in an organization, this problem arises because of the difference in the interest of management, owner, and other related parties. An agency relationship arises whenever one Continue Reading
What is a Bond
Questions may arise in your mind that what is a bond. A bond is a financial instrument used by the government or corporations to collect money from the market. It provides a fixed benefit to the bondholders periodically Continue Reading
Basic Types of Risk
We know that the future is uncertain, and because of uncertainty; the involvement of risk can be traced to every part of life. When we talk about any investment we have to think about risk and return, the Continue Reading
Perfect Capital Market
What is meant by a perfect capital market? If a capital market has the following characteristics then it would be considered as a perfect capital market. In perfect capital market case, assuming complete markets, perfect rationality of agents Continue Reading