Corporate Law and Corporate Governance
Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers
Michael C. Jensen
- Year
- 1986
- Venue
- American Economic Review
- Level
- Advanced
Summary
Develops the free-cash-flow account of managerial agency costs. The article explains why managers may retain and invest excess cash rather than distribute it, and why debt, takeovers, and organizational restructuring can constrain discretion while creating their own risks and costs.
Citation
Michael C. Jensen. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers." American Economic Review, 1986.
BibTeX
@article{Jensen1986Agency,
title = {Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers},
author = {Michael C. Jensen},
year = {1986},
journal = {American Economic Review},
url = {https://papers.ssrn.com/sol3/papers.cfm?abstract_id=99580}
}