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Agency costs: which statement is correct

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One statement is correct.

1. Given the multi-owner nature of most large corporations, agency costs associated with perquisite consumption are not really a problem.

2. Shareholder agency costs include the opportunity costs associated with constraining managerial freedom but don not include managerial salaries.

3. An agency relationship exists when one or more persons hire another person to perform some sevice but withhold decision-making authority from that person.

4. All statement are false.

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The solution gives the correct answer and also explains why the others responses are not correct.

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4. All statements are false

The agency costs are certainly a ...

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