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Definition of 'Agency Cost Of Debt'
A problem arising from the conflict of interested created by the separation of management from ownership (the stockholders) in a publicly owned company. Corporate governance mechanisms, such as boards of directors and the issuance of debt, are used in an attempt to reduce this conflict of interest. However, introducing debt into the picture creates yet another potential conflict of interest because there are three parties involved: owners, managers and lenders (bondholders), each with different goals.
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Investopedia explains 'Agency Cost Of Debt'
For example, managers may want to engage in risky actions they hope will benefit shareholders, who seek a high rate of return. Bondholders, who are typically interested in a safer investment, may want to place restrictions on the use of their money to reduce their risk. The costs resulting from these conflicts are known as the agency cost of debt.
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Search results for 'Agency Cost Of Debt'
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http://www.investopedia.com/exam-guide/series-7/debt-securities/agency-bonds.asp
... 4.5 Government Debt; 4.6 Treasury Bonds; 4.7 Agency Bonds; 4.8 ... 6.6 Net Asset Value
(NAV); 6.7 Dollar Cost Averaging; 6.8 Mutual Fund Management; 6.9 Types of ...
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http://www.investopedia.com/articles/pf/11/island-approach-credit-cards.asp
... bad credit as of April 2010, according to the credit-scoring agency FICO. ... financial
discipline, clarity and most importantly a way to lower the cost of debt ...
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http://financialedge.investopedia.com/financial-edge/1011/Consumer-Debt-Knowing-Your-Legal-Rights.aspx
... for companies to, either, pass your debt onto a registered collection agency, or
sell it onto to a debt purchasing company for a reduced cost, with the result ...
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http://www.investopedia.com/exam-guide/series-7/packaged-securities/dollar-cost-averaging.asp
... 4.5 Government Debt; 4.6 Treasury Bonds; 4.7 Agency Bonds; 4.8 ... 6.6 Net Asset Value
(NAV); 6.7 Dollar Cost Averaging; 6.8 Mutual Fund Management; 6.9 Types of ...
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http://www.investopedia.com/exam-guide/finra-series-6/investment-securities/agency-issues-us-united-states-savings-bonds.asp
... Agency securities include debt instruments issued both by federal ... Both federal agency
and GSE securities are subject ... by Congress to provide low-cost loans for ...
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http://www.investopedia.com/articles/bonds/09/bond-rating-agencies.asp
... need to be considered when an agency makes a ... eventually issuing common stock without
using debt for leverage ... affects a company by changing the cost of borrowing ...
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http://www.investopedia.com/exam-guide/series-7/debt-securities/corporate-bonds.asp
... 4.5 Government Debt; 4.6 Treasury Bonds; 4.7 Agency Bonds; 4.8 ... 6.6 Net Asset Value
(NAV); 6.7 Dollar Cost Averaging; 6.8 Mutual Fund Management; 6.9 Types of ...
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http://www.investopedia.com/exam-guide/series-7/debt-securities/treasury-bond.asp
... 4.5 Government Debt; 4.6 Treasury Bonds; 4.7 Agency Bonds; 4.8 ... 6.6 Net Asset Value
(NAV); 6.7 Dollar Cost Averaging; 6.8 Mutual Fund Management; 6.9 Types of ...
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http://stocks.investopedia.com/stock-analysis/2009/ETFs-For-A-Low-Cost-Long-Term-Portfolio-VTI-IGE-BND-VEA-VNQ1028.aspx
... IN PICTURES: Digging Out Of Debt In 8 Steps Keeping It ... This includes Treasuries,
Corporate and Agency IOUs ... basic portfolio can provide a good low-cost core that ...
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http://www.investopedia.com/university/credit-debt-management/management3.asp
... reports from each credit reporting agency at least ... separately purchased, this is
a cost-effective way ... Next: Credit And Debt Management: Credit Cards ยป. Table ...
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