The agency cost of financial decision making: an empirical analysis

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dc.contributor.authorCrutchley, Claire Elaineen
dc.contributor.committeechairHansen, Robert S.en
dc.contributor.committeememberJohnson, Dana J.en
dc.contributor.committeememberKumar, Ramanen
dc.contributor.committeememberKeown, Arthur J.en
dc.contributor.committeememberFerris, Stephen P.en
dc.contributor.committeememberTaylor, Bernard W. IIIen
dc.contributor.departmentFinanceen
dc.date.accessioned2014-08-13T14:38:34Zen
dc.date.available2014-08-13T14:38:34Zen
dc.date.issued1987en
dc.description.abstractJensen and Meckllng in "Theory of the Firm: Managerial Behavior and Capital Structure" [1976] introduced the concept that managers choose their ownership in the firm and leverage ratio to minimize agency costs. Easterbrook [1984] and Rozeff [1982] extended this notion with the hypothesis that dividends are paid to reduce equity agency costs. Myers [1977] explained debt agency costs as being a possible underinvestment problem with risky debt, and Jensen [1986] hypothesized that increases in debt could control the free cash flow agency problem. This dissertation will be a comprehensive test of Jensen and Meckling’s agency theory including extensions by Rozeff, Easterbrook, Myers and Jensen. To test agency theory a contemporaneous three equation model determining managerial ownership, leverage and dividends is specified. The exogenous variables include variables which are expected to impact upon agency costs, diversification measures, and variables registering non-agency explanations of leverage and dividends. This dissertation provides critically needed empirical evidence on the agency problem and a specific test of Jensen and Meckling.en
dc.description.adminincomplete_metadataen
dc.description.degreePh. D.en
dc.format.extentix, 82 leavesen
dc.format.mimetypeapplication/pdfen
dc.identifier.urihttp://hdl.handle.net/10919/49840en
dc.publisherVirginia Polytechnic Institute and State Universityen
dc.relation.isformatofOCLC# 16887934en
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subject.lccLD5655.V856 1987.C787en
dc.subject.lcshDecision makingen
dc.subject.lcshBusiness enterprises -- Financeen
dc.subject.lcshInvestmentsen
dc.subject.lcshCapital investmentsen
dc.titleThe agency cost of financial decision making: an empirical analysisen
dc.typeDissertationen
dc.type.dcmitypeTexten
thesis.degree.disciplineFinanceen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.namePh. D.en

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