Agency theory and trust ownership of shares
The problems of agency theory related to security valuation are normally discussed in the context of “owner-managers” and “outside shareholders”, and/or equity-holders and debt-holders. In this paper we discuss agency problems that emerge when there is only one shareholder (and no debt), but where the shareholder is a trust with separate income and capital beneficiaries. Trust ownership of this sort is not uncommon. The agency problems emerge as the two classes of beneficiaries have claims on cash flows that occur at different times, with income beneficiaries having claims until “capital” is transferred to the capital beneficiaries. The agency problems that are discussed are dividends, risk shifting, capital structure, cost capitalisation, and investment policy. In all cases agency problems arise, and in some respects the agency problems are more pervasive than in the more “orthodox” settings.
Volume (Year): 39 (2005)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RNZP20 |
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RNZP20|
When requesting a correction, please mention this item's handle: RePEc:taf:nzecpp:v:39:y:2005:i:2:p:195-207. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.