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Which one shows the agency cost based on agency theory? 1.lower earnings figure 2.decrease in stock...

Which one shows the agency cost based on agency theory?

1.lower earnings figure

2.decrease in stock price

3.Overinvestment of the firm's cash by managers

4.Audit failure by external auditor

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Answer #1

Solution Agency Cost It refers to the cost which generates internally while acting by the agent on the behalf of the principa

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