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Agency TheoryAccording to Investopedia, "Agency theory is a very academic term. Essentially it involves the costs of resolving conflicts between the principals and agents and aligning interests of the two groups."

It examine issues like, at what risk level will both debt holders ,manager ,and ultimately shareholder benefit maximally from investements undertaken by the company

Agency theory is also commonly used to examine the condition of slaves in the antebellum United States. Agency theory argues that slaves had some say in the way they were treated, such as by affecting their sale and their market value. Agency theory has also sometimes been used however, as something of an apology for slavery, and is therefore sometimes controversial.

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Q: What issue does agency theory examine?
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What issue does agency theory examine and is it more important in a public or private entity?

The agency theory examines the idea that when one group or individual hires another group or individual and gives them authority, numerous issues will arise between the two parties. This becomes more important in a public entity due to the conflicts between shareholders and the company management.


What issues does agency theory examine?

This theory examines the relationship between the owers of a firm and the managers of the firm. While managment has the responsibility for acting as the agent for the stockholders in pursuing their best interests, the key question is how well does managment perform this role?


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What is contained in the agency theory?

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Why is agency theory important in a public corporation?

Because it isn't important in a private cooperation.