Implicit agency costs do not have a direct expense associated with them, but they harm shareholders anyway.

Question

Quizplus · Accepted Answer

Implicit agency costs refer to the indirect costs incurred by shareholders due to conflicts of interest between management and shareholders which may result in suboptimal decision making. These costs do not have a direct dollar amount associated with them, but they harm shareholders by reducing the value of their investments. Therefore, the answer is true.

Implicit Agency Costs Do Not Have a Direct Expense Associated