Capital Structure and Agency Costs

外文文献翻译译文一、外文原文原文：The influence of corporate governance on the relation betweencapital structure and valueCapital structure: relation with corporate value and main research streamsWhen looking at the most important theoretical contributions on the relation between capital structure and value, as illustrated in Figure 1, it becomes immediately evident that there is a substantial difference between the early theories and the more recent ones.Modigliani and Miller (1958), who had originally asserted that there was no relationship between capital structure and value ; in 1963, instead, reached the paradoxical and provocative conclusion that a maximum level of debt would mean a maximum level of firm value, due to the fact that interest is tax deductible . Many later contributions pointed out that this effect is compensated when considering personal taxes (Miller, 1977),an eventual lack of tax capacity, due to the presence of economic loss, the effect of other types of tax shields (De Angelo and Masulis, 1980), as well as the introduction of the costs(direct and indirect) of financial distress; all these situations end up creating a trade-off between debt costs and benefits. Point L’ in Figure 1c indicates an optimal level of debt,beyond which any rise in leverage would cause an increase in the benefits of debt that would be less than proportional with respect to the costs of financial distress. Furthermore, this non monotonic relation would be modified even more when considering agency costs as well as the costs of financial distress . Finally, one last stream of research (Myers, 1984,Myers 1984) points out managerial preferences when choosing financing resources . In this case no optimal level of debt becomes ‘‘objectively’’ evident,but this is due to the various situations the manager had to deal with over time. The function of managerialpreference has particular relevance due to information asymmetries, therefore the level of firm indebtedness will be determined by the tangent between the firm value function and the curve of manager indifference.Furthermore, it can be observed that debt increases in correspondence with the better the firm’s reputation is on the market (Chevalier, 1995). Research has shown similarities between firms that belong to the same sector (Titman and Wessels, 1988); in other words, capital structure tends to be industry-specific.The empirical comparison between the trade-off theory and the pecking order theory seems to be controversial. On one hand, empirical evidence shows moderate coherence with the trade-off theory, when revenue and agency problems are taken into consideration contextually; on the other hand, the negative relation between leverage and firm profit does not seem to support the trade-off theory, as it confirms a hierarchical order in financial decision making.It is, thus, clear that the topic of capital structure is anything but defined and that there are still many open problems regarding it.As many authors have noted (Rajan and Zingales, 1995) capital structure is a ‘‘hot’’ topic in finance. By analyzing international literature the main research priorities and new analytical approaches are related to:the important comparison between ‘‘rational’’ and ‘‘behavioural’’ finance (Barberis and Thaler, 2002);a lively comparison made between the pecking order theory and the trade-off theory(Shyam-Sunder and Myers, 1999);the attempt to apply these theories to small firms (Berger and Udell, 1998, Fluck, 2001);the role of corporate governance on the relation between capital structure and value(Heinrich, 2000, Bhagat and Jefferis, 2002, Brailsford et al., 2004, Mahrt-Smith, 2005).The behavioural approach, that considers the pecking order of financial resources in terms of ‘‘irrational’’ preferences, caused an immediate reactio n from Stewart Myers in 2000 and 2001 and jointly with Shyam-Sunder in 1999 (Myers, 2000; 2001; Shyam-Sunder and Myers,1999). Stewart Myers is the founder of the pecking order theory[7]. Problems of information asymmetry, together with transaction costs, would be able to offer a rational explanation to managerial behaviour when financial choicesare made following a hierarchical order (Fama and French, 2002). In other words, according to Myers and Fama, there should be a‘‘rational’’ explanation to the phenomenon observed by Stein, Baker, Wrugler, Barberis and Thaler.Moreover, studies on capital structure have also been done looking at small and medium size firms (Berger and Udell, 1998, Michaelas et al., 1999, Romano et al., 2000, Fluck, 2001),due to the relevant economic role of these firms (in Europe they are 95 percent of the total firms operating). Zingales (2000) as well has emphasized the fact that today ‘‘ . . . the attention shown towards large firms tends to partially obscure firms that do not have access to the financial markets . . . ’’. In one of the most interesting studies done on this topic, Berger and Udell (1998) asserted that firm financial behaviour depends on what phase of their life cycle they are in. In fact, there should be an optimal pro-tempore capital structure, related to the phase of the life cycle that the firm is in.Finally, the observations of Michael Jensen (1986), made throughout his many contributions on corporate governance, as well as those of Williamson (1988), have encouraged a line of research that, revitalized in the second part of the nineties, seems to be quite promising as a means to analyze how corporate governance directly or indirectly influences the relation between capital structure and value (Fluck, 1998, Zhang, 1998, Myers, 2000, De Jong, 2002,Berger and Patti, 2003, Brailsford et al., 2004, Mahrt-Smith, 2005). In synthesis, it is possible to affirm, as it follows, that a joined analysis of capital structure and corporate governance is necessary when describing and interpreting the firm’s ability to create value (Zingales, 2000, Heinrich, 2000, Bhagat and Jefferis, 2002). This type of consideration could help overcome the controversy found when studying the relation between capital structure and value, on both a theoretical and empirical level.Influence of corporate governance on the relation between capital structure and value.Capital structure can be analyzed by looking at the rights and attributes that characterize the firm’s assets and that influence, with d ifferent levels of intensity, governance activities. Equity and debt, therefore, must be considered as both financialinstruments and corporate governance instruments (Williamson, 1988): debt subordinates governance activities to stricter management, while equity allows for greater flexibility and decision making power. It can thus be inferred that when capital structure becomes an instrument of corporate governance, not only the mix between debt and equity and their well known consequences as far as taxes go must be taken into consideration. The way in which cash flow is allocated (cash flow right) and, even more importantly, how the right to make decisions and manage the firm (voting rights) is dealt with must also be examined. For example, venture capitalists are particularly sensitive to how capital structure and financing contracts are laid out, so that an optimal corporate governance can be guaranteed while incentives and checks for management behavior are well established (Zingales, 2000)[10].Coase (1991), in a sort of critique on his own work done in 1937, points out that it is important to pay more attention to the role of capital structure as an instrument that can mediate and moderate economical transactions within the firm and, consequently, between entrepreneurs and other stakeholders (corporate governance relations).As explicitly pointed out by Bhagat and Jefferis (2002), when they pay particular attention to the relations between cause and effect and to their interactions recently described on a theoretical level (Fluck, 1998, Zhang, 1998, Heinrich, 2000, Brailsford et al., 2004,Mahrt-Smith, 2005), a ‘‘research proposal’’ that future empirical studies should evaluate should be, how corporate governance can potentially have a relevant influence on the relation between capital structure and value, with an effect of mediation and/or moderation.The five relations identified in Figure 2 describe:the relation between capital structure and firm value (relation A) through a role of corporate governance ‘‘mediation’’ ; the relation between capital structure and firm value (relation A) through the role of capital governance ‘‘moderation’’ (relation D);the role of corporate governance as a determining factor in choices regarding capital structure (relation E).All five relations shown in Figure 2 are particularly interesting and show two threads of research that focus on the relations between:corporate governance andcapital structure, where the dimensions of the corporate governance determine firmfinancing choices, causing a possible relation of co-causation Whether management voluntarily chooses to use debt as a source of financing to reduce problems of information asymmetry and transaction, maximizing the efficiency of its firm governance decisions, or the increase in the debt level is forced by the stockholders as an instrument to discipline behavior and assure good corporate governance, capital structure is influenced by corporate governance (relation E) and vice versa (relation B).On one hand, a change in how debt and equity are dealt with influences firm governance activities by modifying the structure of incentives and managerial control. If, through the mix debt and equity, different categories of investors all converge within the firm, where they have different types of influence on governance decisions, then managers will tend to have preferences when determining how one of these categories will prevail when defining the firm’s capital structure. Even more importantly, through a specific design of debt contracts and equity it is possible to considerably increase firm governance efficiency.On the other hand, even corporate governance influences choices regarding capital structure (relation E). Myers (1984) and Myers and Majluf (1984) show how firmfinancing choices are made by management following an order of preference; in this case, if the manager chooses the financing resources it can be presumed that she is avoiding a reduction of her decision making power by accepting the discipline represented by debt.Internal resource financing allows management to prevent other subjects from intervening in their decision making processes. De Jong (2002) reveals how in the Netherlands managers try to avoid using debt so that their decision making power remains un checked. Zwiebel(1996) has observed that managers don’t voluntarily accept the ‘‘discipline’’ of debt; other governance mechanisms impose that debt is issued. Jensen (1986) noted that decisions to increase firm debt are voluntarily made by management when it intends to ‘‘reassure’’stakeholders that its governance decisions are ‘‘proper’’.In this light, firm financing decisions can be strictly deliberated bymanagers-entrepreneurs or else can be induced by specific situations that go beyond the will of the management.ConclusionThis paper define a theoretical approach that can contribute in clearing up the relation between capital structure, corporate governance and value, while they also promote a more precise design for empirical research. Capital structure represents one of many instruments that can preserve corporate governance efficiency and protect its ability to create value.Therefore, this thread of research affirms that if investment policies allow for value creation,financing policies, together with other governance instruments, can assure that investment policies are carried out efficiently while firm value is protected from opportunistic behavior.In other words, various authors (Borsch-Supan and Koke, 2000, Bhagat and Jefferis, 2002 and Berger and Patti, 2003) point out the necessity to analyze the relation between capital structure and value by always taking into consideration the interaction between corporate governance variables such as ownership concentration, management participation in the equity capital, the composition of the Board of Directors, etc.Furthermore, there is a problem in the way to operationalize these constructs, due to multidimensional nature of these. It is quite difficult to identify indicators that perfectly correspond to theoretical constructs; it means that proxy variables, or empirical measures of latent constructs, must be used (Corbetta, 1992).Moreover, it must be considered possible that there may be distortions in the signs and entities of the connections between variables due to endogeneity problems, or rather the presence of co-variation even when there is no cause, and reciprocal cause, where the distinction between the cause variable and the effect variable are lacking, and the two reciprocally influence each other.From an econometric point of view, therefore, it would seem to be important to further investigate the research proposal outlined above, by empirically examining the model proposed in Figure 2 using appropriate econometric techniques that can handle the complexity of the relations between the elements studied. Some proposals forstudy can be found in literature; the use of lagged variables is criticized by Borsch-Supan and Koke(2000) that affirm that it would be better to determine instrumental variables that influence only one of the two elements of study; Berger and Patti (2003), Borsch-Supan and Koke(2000) and Chen and Steiner (1999) promote the application of structural model equations to solve these problems, that is a method appropriate for examining the causal relations between latent, one-dimensional or multi-dimensional variables, measured with multiple indicators (Corbetta, 1992).In conclusion, this paper defines a theoretical model that contributes to clarifying the relations between capital structure, corporate governance and firm value, while promoting,as an aim for future research, a verification of the validity of this model through application of the analysis to a wide sample of firms and to single firms. To study the interaction between capital structure, corporate governance and value when analyzing a wide sample of firms,the researcher has to take into account the relations showed in Figure 2, look at problems of endogeneity and reciprocal causality, and make sure there is complementarity between all the three factors. Such an analysis deserves the application of refined econometric techniques. Moreover, these relations should be investigated in a cross-country analysis, to catch the role of country-specific factors.Source: Maurizio La Rocca,2007 “The influence of corporate governance on the relation between capital structure and value”. corporate gorernance,vol.7,no.3april,pp.312-325.二、翻译文章译文：公司治理对资本结构和企业价值关系的影响资本结构: 关系到公司价值及其主要研究趋向当查看关于描述资本结构与企业价值两者之间总体关系的最重要的理论文献时，会明显感觉到早期的理论与新近的理论有实质性的不同。

/中华会计网校会计人的网上家园Agency Theory and Capital StructureACCA P4考试：Agency Theory and Capital Structure1 Agency CostsIn many firms there is a "divorce of ownership from control"; shareholders (the principals) delegate the running of the firm to the directors (their agents).This inevitably leads to the risk that the directors will fail to maximise shareholders' wealth. This is known as the "agency problem" and the resulting loss of wealth "agency costs".Agency costs can be categorised into two main types:Lost returns due to directors following objectives that fail to align with those of shareholders (e.g. personal objectives such as empire building, or prioritising the objectives of other stakeholders, in particular debt investors).The costs of monitoring the directors and management (e.g. the costs of internal audit departments and of implementing corporate governance procedures).2 Impact of Gearing on Agency CostsResearch has found that moderate levels of debt can actually reduce the level of agency costs for the following reasons:the existence of debt encourages company directors to practice sound finan cia l discipline (e.g. careful cost control);debt investors, especially banks, implement their own monitoring systems (e.g. requiring regular cash flow forecasts). This reduces the level of monitoring required by the equity investors.However at high levels of gearing these benefits may become out-weighted by other problems for the equity investors:increasingly onerous debt covenants restrict the directors' ability to undertake any projects except those of very low risk. This limits potential gains for equity investors.potential costs of financial distress – if the firm is perceived as being at risk of default then suppliers may refuse credit,key employees might leave, customers may lose faith in any warranties given on the products, etc. If the firm actually does default it may go through a capital reconstruction (the costs of which would also be borne by the shareholders) or be forced into liquidation (in which case equity investors rank last for repayment of capital).Therefore there may be an optimal capital structure in terms of minimising agency costs, although research is mixed as to where this optimal point may lie.。

agency costs 概念嘿，朋友！咱今天来聊聊 agency costs 这个概念。

您知道吗？agency costs 就像是一场拔河比赛中的摩擦力。

在企业里，股东把权力交给了管理层，就好比是把绳子的一端交给了他们。

可这时候问题就来了，管理层的想法和股东的期望未必总是一致的呀！比如说，股东想着要赚大钱，让企业价值蹭蹭涨。

可管理层呢，说不定更关心自己的工资奖金、豪华办公室，或者是为了保住自己的位置做出一些短视的决策。

这中间产生的那些损失，就是 agency costs 啦！就像你雇了个工人帮你盖房子，你满心期待他能又快又好地完工，结果他偷工减料，或者磨洋工，浪费了你的材料和时间，这不是让你亏了嘛！agency costs 还能细分成好几种呢。

有一种叫监督成本，就像是你得盯着那个工人干活，怕他偷懒犯错，这得花精力吧？还有一种叫约束成本，你得制定各种规矩，防止他乱来，这是不是也得费心思？再打个比方，你开了个小商店，雇了个店员。

你不在的时候，他可能偷偷给自己的朋友便宜卖东西，或者对顾客态度不好，影响了生意。

这损失不就是 agency costs 吗？那怎么降低 agency costs 呢？这可不容易，但也不是没办法。

就像治病得对症下药一样。

首先得有透明的信息披露，让股东能清楚知道管理层在干啥。

这就好比屋里亮堂了，啥猫腻都藏不住。

然后呢，给管理层合适的激励，让他们的利益和股东绑在一起。

比如说给他们股份，企业好了他们赚得多，那他们能不努力吗？还有啊，建立良好的公司治理结构，就像给房子搭个坚固的框架，谁该干啥，清清楚楚。

您说，要是不管这 agency costs ，企业能发展好吗？肯定不行啊！这就好比一辆车，零件都不匹配，能跑得顺吗？所以啊，弄明白 agency costs 这个概念，对企业的经营管理太重要啦！咱们都得重视起来，才能让企业这辆车跑得又快又稳！。

Agency Costs of Free Cash Flow, Corporate Finance, and TakeoversMichael C. JensenAmerican Economic Review, May 1986, V ol. 76, No. 2, pp. 323-329.Corporate managers are the agents of shareholders, a relationship fraught with conflict ing interests. Agency theory, the analysis of such conflicts, is now a major part of th e economics literature. The payout of cash to shareholders creates major conflicts tha t have received little attention. Payouts to shareholders reduce the resources under ma nagers’control, thereby reducing managers’power, and making it more likely they w ill incur the monitoring of the capital markets which occurs when the firm must obtai n new capital (see Easterbrook, 1984, and Rozeff, 1982). Financing projects internall y avoids this monitoring and the possibility the funds will be unavailable or availabl e only at high explicit prices.Managers have incentives to cause their firms to grow beyond the optimal size. Growt h increases managers’power by increasing the resources under their control. It is als o associated with increases in managers’compensation, because changes in compens ation are positively related to the growth in sales (see Murphy, 1985). The tendency o f firms to reward middle managers through promotion rather than year-to-year bonuse s also creates a strong organizational bias toward growth to supply the new positions t hat such promotion-based reward systems require (see Baker, 1986).Competition in the product and factor markets tends to drive prices towards minimu m average cost in an activity. Managers must therefore motivate their organizations t o increase efficiency to enhance the problem of survival. However, product and facto r market disciplinary forces are often weaker in new activities and activities that invol ve substantial economic rents or quasi rents. In these cases, monitoring by the firm’s i nternal control system and the market for corporate control are more important. Activi ties generating substantial economic rents or quasi rents are the types of activities tha t generate substantial amounts of free cash flow.Free cash flow is cash flow in excess of that required to fund all projects that have pos itive net present values when discounted at the relevant cost of capital. Conflicts of int erest between shareholders and managers over payout policies are especially severe w hen the organization generates substantial free cash flow. The problem is how to moti vate managers to disgorge the cash rather than investing it at below the cost of capita l or wasting it on organization inefficiencies.The theory developed here explains 1) the benefits of debt in reducing agency costs o f free cash flows, 2) how debt can substitute for dividends, 3) why “diversification” p rograms are more likely to generate losses than takeovers or expansion in the same line of business or liquidation-motivated takeovers, 4) why the factors generating takeov er activity in such diverse activities as broadcasting and tobacco are similar to thosei n oil, and 5) why bidders and some targets tend to perform abnormally well prior to ta keover.I. The Role of Debt in Motivating Organizational EfficiencyThe agency costs of debt have been widely discussed, but the benefits of debt in motiv ating managers and their organizations to be efficient have been ignored. I call these e ffects the ”control hypothesis”for debt creation.Managers with substantial free cash flow can increase dividends or repurchase stock a nd thereby pay out current cash that would otherwise be invested in low-return project s or wasted. This leaves managers with control over the use of future free cash flow s, but they can promise to pay out future cash flows by announcing a ”permanent” in crease in the dividend. Such promises are weak because dividends can be reduced in t he future. The fact that capital markets punish dividend cuts with large stock price red uctions is consistent with the agency costs of free cash flow.Debt creation, without retention of the proceeds of the issue, enables managers to effe ctively bond their promise to pay out future cash flows. Thus, debt can be an effectiv e substitute for dividends, something not generally recognized in the corporate financ e literature. By issuing debt in exchange for stock, managers are bonding their promis e to pay out future cash flows in a way that cannot be accomplished by simple dividen d increases. In doing so, they give shareholder recipients of the debt the right to take t he firm into bankruptcy court if they do not maintain their promise to make the interes t and principal payments. Thus debt reduces the agency costs of free cash flow by red ucing the cash flow available for spending at the discretion of managers. These contro l effects of debt are a potential determinant of capital structure.Issuing large amounts of debt to buy back stock also sets up the required organization al incentives to motivate managers and to help them overcome normal organizationa l resistance to retrenchment which the payout of free cash flow often requires. The thr eat caused by failure to make debt service payments serves as an effective motivating force to make such organizations more efficient. Stock repurchases for debt or cash also has tax advantages. (Interest payments are tax deductible to the corporation, an d that part of the repurchase proceeds equal to the seller’s tax basis in the stock is no t taxed at all.)Increased leverage also has costs. As leverage increases, the usual agency costs of deb t rise, including bankruptcy costs. The optimal debt-equity ratio is the point at which f irm value is maximized, the point where the marginal costs of debt just offset the mar ginal benefits.The control hypothesis does not imply that debt issues will always have positive contr ol effects. For example, these effects will not be as important for rapidly growing orga nizations with large and highly profitable investment projects but no free cash flow. S uch organizations will have to go regularly to the financial markets to obtain capita l. At these times the markets have an opportunity to evaluate the company, its manage ment, and its proposed projects. Investment bankers and analysts play an important rol e in this monitoring, and the market’s assessment is made evident by the price investo rs pay for the financial claims.The control function of debt is more important in organizations that generate large cas h flows but have low growth prospects, and even more important in organizations tha t must shrink. In these organizations the pressures to waste cash flows by investing th em in uneconomic projects is most serious.II. Evidence from Financial RestructuringThe free cash flow theory of capital structures helps explain previously puzzling result s on the effects of financial restructuring. My paper with Clifford Smith (1985, Tabl e 2) and Smith (1986, Tables 1 and 3) summarize more than a dozen studies of stock p rice changes at announcements of transactions which change capital structure. Most le verage-increasing transactions, including stock repurchases and exchange of debt or p referred for common, debt for preferred, and income bonds for preferred, result in sig nificant positive increases in common stock prices. The 2-day gains range from 21.9 p ercent (debt for common) to 2.2 percent (debt or income bonds for preferred). Most le verage-reducing transactions, including the sale of common, and exchange of commo n for debt or preferred, or preferred for debt, and the call of convertible bonds or conv ertible preferred forcing conversion into common, result in significant decreases in sto ck prices. The 2-day losses range from -9.9 percent (common for debt) to -0.4 percen t (for call of convertible preferred forcing conversion to common). Consistent with thi s, free cash flow theory predicts that, except for firms with profitable unfunded invest ment projects, prices will rise with unexpected increases in payouts to shareholders (o r promises to do so), and prices will fall with reductions in payments or new requests f or funds (or reductions in promises to make future payments).The exceptions to the simple leverage change rule are targeted repurchases and the sal e of debt (of all kinds) and preferred stock. These are associated with abnormal pric e declines (some of which are insignificant). The targeted repurchase price decline see ms to be due to the reduced probability of takeover. The price decline on the sale of de bt and preferred stock is consistent with the free cash flow theory because these sale s bring new cash under the control of managers. Moreover, the magnitudes of the valu e changes are positively related to the change in the tightness of the commitment bonding the payment of future cash flows; for example, the effects of debt for preferred ex changes are smaller than the effects of debt for common exchanges. Tax effects can ex plain some of these results, but not all, for example, the price increases on exchange o f preferred for common, which has no tax effects.III. Evidence from Leveraged Buyout and Going Private Transactions Many of the be nefits in going private and leveraged buyout (LBO) transactions seem to be due to th e control function of debt. These transactions are creating a new organizational form t hat competes successfully with the open corporate form because of advantages in con trolling the agency costs of free cash flow. In 1984, going private transactions totale d $10.8 billion and represented 27 percent of all public acquisitions (by number, see G rimm, 1984, 1985, 1986, Figs. 36 and 37). The evidence indicates premiums paid aver age over 50 percent.Desirable leveraged buyout candidates are frequently firms or divisions of larger firm s that have stable business histories and substantial free cash flow (i.e., low growth pr ospects and high potential for generating cash flows)—situations where agency cost s of free cash flow are likely to be high. The LBO transactions are frequently financed with high debt; 10 to 1 ratios of debt to equity are not uncommon. Moreover, the use of strip financing and the allocation of equity in the deals reveal a sensitivity to ince ntives, conflicts of interest, and bankruptcy costs.Strip financing, the practice in which risky nonequity securities are held in approxima tely equal proportions, limits the conflict of interest among such securities’ holders a nd therefore limits bankruptcy costs. A somewhat oversimplified example illustrates t he point. Consider two firms identical in every respect except financing. Firm A is enti rely financed with equity, and firm B is highly leveraged with senior subordinated deb t, convertible debt and preferred as well as equity. Suppose firm B securities are sold only in strips, that is, a buyer purchasing X percent of any security must purchase X percent of all securities, and the securities are ”stapled”together so they cannot b e separated later. Security holders of both firms have identical unleveraged claims on t he cash flow distribution, but organizationally the two firms are very different. If fir m B managers withhold dividends to invest in value-reducing projects or if they are in competent, strip holders have recourse to remedial powers not available to the equit y holders of firm A. Each firm B security specifies the rights its holder has in the even t of default on its dividend or coupon payment, for example, the right to take the fir m into bankruptcy or to have board representation. As each security above the equit y goes into default, the strip holder receives new rights to intercede in the organizatio n. As a result, it is easier and quicker to replace managers in firm B.Moreover, because every security holder in the highly leveraged firm B has the sam e claim on the firm, there are no conflicts among senior and junior claimants over reorganization of the claims in the event of default; to the strip holder it is a matter of mov ing funds from one pocket to another. Thus firm B need never go into bankruptcy, th e reorganization can be accomplished voluntarily, quickly, and with less expense an d disruption than through bankruptcy proceedings.Strictly proportional holdings of all securities is not desirable, for example, because o f IRS restrictions that deny tax deductibility of debt interest in such situations and limi ts on bank holdings of equity. However, riskless senior debt needn’t be in the strip, an d it is advantageous to have top-level managers and venture capitalists who promote t he transactions hold a larger share of the equity. Securities commonly subject to stri p practice are often called ”mezzanine” financing and include securities with priority s uperior to common stock yet subordinate to senior debt.Top-level managers frequently receive 15-20 percent of the equity. Venture capitalist s and the funds they represent retain the major share of the equity. They control the bo ard of directors and monitor managers. Managers and venture capitalists have a stron g interest in making the venture successful because their equity interests are subordina te to other claims. Success requires (among other things) implementation of changes t o avoid investment in low return projects to generate the cash for debt service and to i ncrease the value of equity. Less than a handful of these ventures have ended in bankr uptcy, although more have gone through private reorganizations. A thorough test of thi s organizational form requires the passage of time and another recession.IV. Evidence from the Oil IndustryRadical changes in the energy market since 1973 simultaneously generated large incre ases in free cash flow in the petroleum industry and required a major shrinking of the i ndustry. In this environment the agency costs of free cash flow were large, and the tak eover market has played a critical role in reducing them. From 1973 to the late 1970’s, crude oil prices increased tenfold. They were initially accompanied by increases i n expected future oil prices and an expansion of the industry. As consumption of oil fe ll, expectations of future increases in oil prices fell. Real interest rates and exploratio n and development costs also increased. As a result the optimal level of refining and d istribution capacity and crude reserves fell in the late 1970’s and early 1980’s, leavin g the industry with excess capacity. At the same time profits were high. This occurre d because the average productivity of resources in the industry increased while the ma rginal productivity decreased. Thus, contrary to popular beliefs, the industry had to sh rink. In particular, crude oil reserves (the industry’s major asset) were too high, and cu tbacks in exploration and development (E&D) expenditures were required (see Jense n, 1986).Price increases generated large cash flows in the industry. For example, 1984 cash flows of the ten largest oil companies were $48.5 billion, 28 percent of the total cash flo ws of the top 200 firms in Dun’s Business Month survey. Consistent with the agency c osts of free cash flow, management did not pay out the excess resources to shareholde rs. Instead, the industry continued to spend heavily on E&D activity even though aver age returns were below the cost of capital.Oil industry managers also launched diversification programs to invest funds outside t he industry. The programs involved purchases of companies in retailing (Marcor by M obil), manufacturing (Reliance Electric by Exxon), office equipment (Vydec by Exxo n) and mining (Kennecott by Sohio, Anaconda Minerals by Arco, Cyprus Mines by A moco). These acquisitions turned out to be among the least successful of the last deca de, partly because of bad luck (for example, the collapse of the minerals industry) an d partly because of a lack of management expertise outside the oil industry. Althoug h acquiring firm shareholders lost on these acquisitions, the purchases generated socia l benefits to the extent that they diverted cash to shareholders (albeit target shareholde rs) that otherwise would have been wasted on unprofitable real investment projects. Two studies indicate that oil industry exploration and development expenditures hav e been too high since the late 1970’s. McConnell and Muscarella (1986) find that ann ouncements of increases in E&D expenditures in the period 1975-81 were associated with systematic decreases in the announcing firm’s stock price, and vice versa. These results are striking in comparison with their evidence that the opposite market reacti on occurs to changes in investment expenditures by industrial firms, and similar SE C evidence on increases in R&D expenditures. (See Office of the Chief Economist, S EC 1985.) Picchi’s study of returns on E&D expenditures for 30 large oil firms indicat es on average the industry did not earn ” . . even a 10% return on its pretax outlays” (1 985, p. 5) in the period 1982-84. Estimates of the average ratio of the present value o f future net cash flows of discoveries, extensions, and enhanced recovery to E&D exp enditures for the industry ranged from less than 60 to 90 cents on every dollar investe d in these activities.V. Takeovers in the Oil IndustryRetrenchment requires cancellation or delay of many ongoing and planned projects. T his threatens the careers of the people involved, and the resulting resistance means suc h changes frequently do not get made in the absence of a crisis. Takeover attempts ca n generate crises that bring about action where none would otherwise occur.Partly as a result of Mesa Petroleum’s efforts to extend the use of royalty trusts whic h reduce taxes and pass cash flows directly through to shareholders, firms in the oil in dustry were led to merge, and in the merging process they incurred large increases i n debt, paid out large amounts of capital to shareholders, reduced excess expenditures in E&D and reduced excess capacity in refining and distribution. The result has bee n large gains in efficiency and in value. Total gains to shareholders in the Gulf/Chevro n, Getty/Texaco, and Dupont/Conoco mergers, for example, were over $17 billion. M ore is possible. Allen Jacobs (1986) estimates total potential gains of about $200 billio n from eliminating inefficiencies in 98 firms with significant oil reserves as of Decem ber 1984.Actual takeover is not necessary to induce the required retrenchment and return of res ources to shareholders. The restructuring of Phillips and Unocal (brought about by thr eat of takeover) and the voluntary Arco restructuring resulted in stockholder gains ran ging from 20 to 35 percent of market value (totalling $6.6 billion). The restructuring i nvolved repurchase of from 25 to 53 percent of equity (for over $4 billion in each cas e), substantially increased cash dividends, sales of assets, and major cutbacks in capita l spending (including E&D expenditures). Diamond-Shamrock’s reorganization is furt her support for the theory because its market value fell 2 percent on the announcemen t day. Its restructuring involved, among other things, reducing cash dividends by 43 pe rcent, repurchasing 6 percent of its shares for $200 million, selling 12 percent of a ne wly created master limited partnership to the public, and increasing expenditures on oi l and gas exploration by $100 million/year.VI. Free Cash Flow Theory of TakeoversFree cash flow is only one of approximately a dozen theories to explain takeovers, al l of which I believe are of some relevance (Jensen, 1986). Here I sketch out some emp irical predictions of the free cash flow theory, and what I believe are the facts that len d it credence.The positive market response to debt creation in oil industry takeovers (as well as else where, see Bruner, 1985) is consistent with the notion that additional debt increases ef ficiency by forcing organizations with large cash flows but few high-return investmen t projects to disgorge cash to investors. The debt helps prevent such firms from wastin g resources on low-return projects.Free cash flow theory predicts which mergers and takeovers are more likely to destro y, rather than to create, value; it shows how takeovers are both evidence of the conflic ts of interest between shareholders and managers, and a solution to the problem. Acqu isitions are one way managers spend cash instead of paying it out to shareholders. The refore, the theory implies managers of firms with unused borrowing power and large f ree cash flows are more likely to undertake low-benefit or even value-destroying merg ers. Diversification programs generally fit this category, and the theory predicts the y will generate lower total gains. The major benefit of such transactions may be that t hey involve less waste of resources than if the funds had been internally invested in unprofitable projects. Acquisitions not made with stock involve payout of resources t o (target) shareholders and this can create net benefits even if the merger generates op erating inefficiencies. Such low-return mergers are more likely in industries with larg e cash flows whose economics dictate that exit occur. In declining industries, merger s within the industry create value, and mergers outside the industry are more likely t o be low- or even negative-return projects. Oil fits this description and so does tobacc o. Tobacco firms face declining demand due to changing smoking habits but generat e large free cash flow and have been involved in major acquisitions recently. Forest pr oducts is another industry with excess capacity. Food industry mergers also appear t o reflect the expenditure of free cash flow. The industry apparently generates large cas h flows with few growth opportunities. It is therefore a good candidate for leveraged b uyouts and they are now occurring. The $6.3 billion Beatrice LBO is the largest eve r. The broadcasting industry generates rents in the form of large cash flows on its licen ses and also fits the theory. Regulation limits the supply of licenses and the number o wned by a single entity. Thus, profitable internal investments are limited and the indus try’s free cash flow has been spent on organizational inefficiencies and diversificatio n programs—making these firms takeover targets. CBS’s debt for stock restructuring f its the theory.The theory predicts value-increasing takeovers occur in response to breakdowns of int ernal control processes in firms with substantial free cash flow and organizational poli cies (including diversification programs) that are wasting resources. It predicts hostil e takeovers, large increases in leverage, dismantlement of empires with few economie s of scale or scope to give them economic purpose (for example, conglomerates), an d much controversy as current managers object to loss of their jobs or the changes in o rganizational policies forced on them by threat of takeover.The debt created in a hostile takeover (or takeover defense) of a firm suffering sever e agency costs of free cash flow is often not permanent. In these situations, levering th e firm so highly that it cannot continue to exist in its old form generates benefits. It cr eates the crisis to motivate cuts in expansion programs and the sale of those division s which are more valuable outside the firm. The proceeds are used to reduce debt t o a more normal or permanent level. This process results in a complete rethinking of t he organization’s strategy and its structure. When successful a much leaner and compe titive organization results.Consistent with the data, free cash flow theory predicts that many acquirers will tend t o have exceptionally good performance prior to acquisition. (Again, the oil industry fi ts well.) That exceptional performance generates the free cash flow for the acquisitio n. Targets will be of two kinds: firms with poor management that have done poorly pri or to the merger, and firms that have done exceptionally well and have large free cash flow which they refuse to pay out to shareholders. Both kinds of targets seem to exis t, but more careful analysis is desirable (see Mueller, 1980).The theory predicts that takeovers financed with cash and debt will generate larger be nefits than those accomplished through exchange of stock. Stock acquisitions tend t o be different from debt or cash acquisitions and more likely to be associated with gr owth opportunities and a shortage of free cash flow; but that is a topic for future consi deration.The agency cost of free cash flow is consistent with a wide range of data for which th ere has been no consistent explanation. I have found no data which is inconsistent wit h the theory, but it is rich in predictions which are yet to be tested.ReferencesBaker, George (1986). ”Compensation and Hierarchies.” Harvard Business School . Bruner, Robert F. (1985). ”The Use of Excess Cash and Debt Capacity as Motive for Merger.” Colgate Darden Graduate School of Business (December).DeAngelo, Harry, Linda DeAngelo and Edward M. Rice (1984). ”Going Private: Minority Freezeouts and Shareholder Wealth.” Journal of Law and Economics 27 (Oc tober).Donaldson, Gordon (1984). Managing Corporate Wealth. New York, Praeger. Dun’s Business Month (1985). Cash Flow: The Top 200: 44-50.Easterbrook, Frank H. (1984). ”Two Agency-Cost Explanations of Dividends.” Ameri can Economic Review 74 : 650-59.Grimm, W. T. (1984, 1985, 1986). ”Mergerstat Review, Annual Editions.” . Jacobs, E. Allen (1986). ”The Agency Cost of Corporate Control: The Petroleum Industry.” Massachusetts Institute of Technology (March).Jensen, Michael C. (1985). ”When Unocal Won Over Pickins, Shareholders and Socie ty Lost.” Financier 9 (November): 50-52.Jensen, Michael C. (1986). ”The Takeover Controversy: Analysis and Evidence.”Midland Corporate Finance Journal 4, no. 2 (Summer): 6-32.Jensen, M. C. and Jr. Clifford Smith (1985). ”Stockholder, Manager and Creditor Interests: Applications of Agency Theory”. Recent Advances in Corporate Financ e. E. I. Altman and M. G. Subrahmanyam. Homewood, Illinois, Irwin: 93-131. Lowenstein, L. (1985). ”Management Buyouts.” Columbia Law Review 85 (May): 73 0-784.McConnell, John J. and Chris J. Muscarella (1986). ”Corporate Capital Expenditure Decisions and the Market Value of the Firm.” Journal of Financial Economics . Mueller, D. (1980). The Determinants and Effects of Mergers. Cambridge, Oelgeschlager.Murphy, Kevin J. (1985). ”Corporate Performance and Managerial Remuneration: An Empirical Analysis.” Journal of Accounting and Economics 7 (April): 11-42. Picchi, B. (1985). Structure of the U.S. Oil Industry: Past and Future, Salomon Brothe rs.Rozeff, Michael (1982). ”Growth, Beta and Agency Costs as Determinants of Dividen d Payout Ratios.” Journal of Financial Research 5 : 249-259.SEC Office of the Chief Economist (1985). Institutional Ownership, Tender Offers an d Long-Term Investments.Smith, Clifford W. (1986). ”Investment Banking and the Capital Acquisition Process.”Journal of Financial Economics 15 (Nos. 1-2).。

Theory of the Firm: Managerial Behavior,Agency Costs andOwnership StructureMichael C. Jensen Harvard Business School and William H. Meckling*University of Rochester1. Introduction1.1.Motivation of the PaperIn this paper we draw on recent progress in the theory of (1) property rights, (2) agency,and (3) finance to develop a theory of ownership structure for the firm. In addition to tying together elements of the theory of each of these three areas, our analysis casts new light on and has implications for a variety of issues in the professional and popular literature including the definition of the firm, the “separation of ownership and control,” the “social responsibility” of business, the definition of a “corporate objective function,” the determination of an optimal capital structure, the specification of the content of credit agreements, the theory of organizations, and the supply side of the completeness of markets problems.Our theory helps explain:1. why an entrepreneur or manager in a firm which has a mixed financial structure(containing both debt and outside equity claims) will choose a set of activities for the firm such that the total value of the firm is less than it would be if he were the sole owner and why this result is independent of whether the firm operates in monopolistic or competitive product or factor markets;2. why his failure to maximize the value of the firm is perfectly consistent withefficiency;3. why the sale of common stock is a viable source of capital even though managers do not literally maximize the value of the firm;4. why debt was relied upon as a source of capital before debt financing offered any tax advantage relative to equity;5. why preferred stock would be issued;6. why accounting reports would be provided voluntarily to creditors and stockholders, and why independent auditors would be engaged by management to testify to the accuracy and correctness of such reports;7. why lenders often place restrictions on the activities of firms to whom they lend, and why firms would themselves be led to suggest the imposition of such restrictions;8. why some industries are characterized by owner-operated firms whose sole outside source of capital is borrowing;9. why highly regulated industries such as public utilities or banks will have higher debt equity ratios for equivalent levels of risk than the average nonregulated firm;10. why security analysis can be socially productive even if it does not increase portfolio returns to investors.1.2 Theory of the Firm: An Empty Box?While the literature of economics is replete with references to the “theory of the firm,” the material generally subsumed under that heading is not actually a theory of the firm but rather a theory of markets in which firms are important actors. The firm is a “black box” operated so as to meet the relevant marginal conditions with respect to inputs and outputs, thereby maximizing profits, or more accurately, present value. Except for a few recent and tentative steps, however,we have no theory which explains how the conflicting objectives of the individual participants are brought into equilibrium so as to yield this result. The limitations of this black box view of the firm have been cited by Adam Smith and Alfred Marshall, among others. More recently, popular and professional debates over the “social responsibility” of corporations, the separation of ownership and control, and the rash of reviews of the literature on the “theory of the firm” have evidenced continuing concern with these issues.A number of major attempts have been made during recent years to construct a theory of the firm by substituting other models for profit or value maximization, with each attempt motivated by a conviction that the latter is inadequate to explain managerial behavior in large corporations. Some of these reformulation attempts have rejected the fundamental principle of maximizingbehavior as well as rejecting the more specific profit-maximizing model. We retain the notion of maximizing behavior on the part of all individuals in the analysis that follows.1.3 Property RightsAn independent stream of research with important implications for the theory of the firm has been stimulated by the pioneering work of Coase, and extended by Alchian, Demsetz, and others. A comprehensive survey of this literature is given by Furubotn and Pejovich (1972).While the focus of this research has been “property rights”,the subject matter encompassed is far broader than that term suggests. What is important for the problems addressed here is that specification of individual rights determines how costs and rewards will be allocated among the participants in any organization. Since the specification of rights is generally affected through contracting (implicit as well as explicit), individual behavior in organizations, including the behavior of managers, will depend upon the nature of these contracts. We focus in this paper on the behavioral implications of the property rights specified in the contracts between the owners and managers of the firm.1.4 Agency CostsMany problems associated with the inadequacy of the current theory of the firm can also be viewed as special cases of the theory of agency relationships in which there is a growing literature. This literature has developed independently of the property rights literature even though the problems with which it is concerned are similar; the approaches are in fact highly complementary to each other.We define an agency relationship as a contract under which one or more persons (the principal(s)) engage another person (the agent) to perform some service on their behalf which involves delegating some decision making authority to the agent. If both parties to the relationship are utility maximizers, there is good reason to believe that the agent will not always act in the best interests of the principal. Theprincipal can limit divergences from his interest by establishing appropriate incentives for the agent and by incurring monitoring costs designed to limit the aberrant activities of the agent. In addition in some situations it will pay the agent to expend resources (bonding costs) to guarantee that he will not take certain actions which would harm the principal or to ensure that the principal will be compensated if he does take such actions. However, it is generally impossible for the principal or the agent at zero cost to ensure that the agent will make optimal decisions from the principal’s viewpoint. In most agency relationships the principal and the agent will incur positive monitoring and bonding costs (non-pecuniary as well as pecuniary), and in addition there will be some divergence between the agent’s decisions and those decisions which would maximize the welfare of the principal. The dollar equivalent of the reduction in welfare experienced by the principal as a result of this divergence is also a cost of the agency relationship, and we refer to this latter cost as the “residual loss.” We define agency costs as the sum of:1. the monitoring expenditures by the principal,2. the bonding expenditures by the agent,3. the residual loss.Note also that agency costs arise in any situation involving cooperative effort (such as the coauthoring of this paper) by two or more people even though there is no clear-cut principal-agent relationship. Viewed in this light it is clear that our definition of agency costs and their importance to the theory of the firm bears a close relationship to the problem of shirking and monitoring of team production which Alchian and Demsetz (1972) raise in their paper on the theory of the firm.Since the relationship between the stockholders and the managers of a corporation fits the definition of a pure agency relationship, it should come as no surprise to discover that the issues associated with the “separation of ownership and control” in the modern diffuse ownership corporation are intimately associated with the general problem of agency. We show below that an explanation of why and how the agency costs generated by the corporate form are born leads to a theory of the ownership (or capital) structure of the firm.Before moving on, however, it is worthwhile to point out the generality of the agency problem. The problem of inducing an “agent” to behave as if he were maximizing the “principal’s” welfare is quite general. It exists in all organizations and in all cooperative efforts—at every level of management in firms, in universities, in mutual companies, in cooperatives, in governmental authorities and bureaus, in unions, and in relationships normally classified as agency relationships such as those common in the performing arts and the market for real estate. The development of theories to explain the form which agency costs take in each of these situations (where the contractual relations differ significantly), and how and why they are born will lead to a rich theory of organizations which is now lacking in economics and the social sciences generally.We confine our attention in this paper to only a small part of this general problem—the analysis of agency costs generated by the contractual arrangements between the owners and top management of the corporation.Our approach to the agency problem here differs fundamentally from most of theexisting literature. That literature focuses almost exclusively on the normative aspects of the agency relationship; that is, how to structure the contractual relation (including compensation incentives) between the principal and agent to provide appropriate incentives for the agent to make choices which will maximize the principal’s welfare, given that uncertainty and imperfect monitoring exist.We focus almost entirely on the positive aspects of the theory. That is, we assume individuals solve these normative problems, and given that only stocks and bonds can be issued as claims, we investigate the incentives faced by each of the parties and the elements entering into the determination of the equilibrium contractual form characterizing the relationship between the manager (i.e., agent) of the firm and the outside equity and debt holders (i.e., principals).1.5 General Comments on the Definition of the firmRonald Coase in his seminal paper entitled “The Nature of the Firm” (1937) pointed out that economics had no positive theory to determine the bounds of the firm. He characterized the bounds of the firm as that range of exchanges over which the market system was suppressed and where resource allocation was accomplished instead by authority and direction. He focused on the cost of using markets to effect contracts and exchanges and argued that activities would be included within the firm whenever the costs of using markets were greater than the costs of using direct authority. Alchian and Demsetz (1972) object to the notion that activities within the firm are governed by authority, and correctly emphasize the role of contracts as a vehicle for voluntary exchange. They emphasize the role of monitoring in situations in which there is joint input or team production.We are sympathetic to with the importance they attach to monitoring, but we believe the emphasis that Alchian and Demsetz place on joint input production is too narrow and therefore misleading. Contractual relations are the essence of the firm, not only with employees but with suppliers, customers, creditors, and so on. The problem of agency costs and monitoring exists for all of these contracts, independent of whether there is joint production in their sense; i.e., joint production can explain only a small fraction of the behavior of individuals associated with a firm.It is important to recognize that most organizations are simply legal fictions which serve as a nexus for a set of contracting relationships among individuals. This includes firms, non-profit institutions such as universities, hospitals, and foundations, mutual organizations such as mutual savings banks and insurance companies and co-operatives, some private clubs, and even governmental bodies such as cities, states, and the federal government, government enterprises such as TV A, the Post Office, transit systems, and so forth.The private corporation or firm is simply one form of legal fiction which serves as a nexus for contracting relationships and which is also characterized by the existence of divisible residual claims on the assets and cash flows of the organization which can generally be sold without permission of the other contracting individuals. Although this definition of the firm has little substantive content, emphasizing the essential contractual nature of firms and other organizations focuses attention on a crucial set of questions—why particular sets of contractual relations arise for varioustypes of organizations, what the consequences of these contractual relations are, and how they are affected by changes exogenous to the organization. Viewed this way, it makes little or no sense to try to distinguish those things that are “inside” the firm (or any other organization) from those things that are “outside” of it. There is in a very real sense only a multitude of complex relationships (i.e.,contracts) between the legal fiction (the firm) and the owners of labor, material and capital inputs and the consumers of output.Viewing the firm as the nexus of a set of contracting relationships among individuals also serves to make it clear that the personalization of the firm implied by asking questions such as “what should be the objective function of the firm?” or “does the firm have a social responsibility?” is seriously misleading. The firm is not an individual. It is a legal fiction which serves as a focus for a complex process in which the conflicting objectives of individuals (some of whom may “represent” other organizations) are brought into equilibrium within a framework of contractual relations. In this sense the “behavior” of the firm is like the behavior of a market, that is, the outcome of a complex equilibrium process. We seldom fall into the trap of characterizing the wheat or stock market as an individual, but we often make this error by thinking about organizations as if they were persons with motivations and intentions.1.6 Overview of the PaperWe develop our theory in stages. Sections 2 and 4 provide analyses of the agency costs of equity and debt respectively. These form the major foundation of the theory. In Section 3, we pose some questions regarding the existence of the corporate form of organization and examines the role of limited liability. Section 5 provides a synthesis of the basic concepts derived in sections 2-4 into a theory of the corporate ownership structure which takes account of the trade-offs available to the entrepreneur-manager between inside and outside equity and debt. Some qualifications and extensions of the analysis are discussed in section 6, and section 7 contains a brief summary and conclusions.企业理论：管理行为，代理成本和所有权结构迈克尔詹森哈佛商学院和威廉H.麦克林罗切斯特大学1．简介1.1.研究背景在本文中，我们借鉴在产权，机构，以及金融方面的最新成果，希望可以发展一种所有制结构的企业理论。

A部AAA 美国会计学会Abacus 《算盘》杂志abacus 算盘Abandonment 废弃,报废;委付abandonment value 废弃价值abatement ①减免②冲销ability to service debt 偿债能力abnormal cost 异常成本abnormal spoilage 异常损耗above par 超过票面价值above the line 线上项目absolute amount 绝对数,绝对金额absolute endorsement 绝对背书absolute insolvency 绝对无力偿付absolute priority 绝对优先求偿权absolute value 绝对值absorb 摊配,转并absorption account 摊配账户,转并账户absorption costing 摊配成本计算法abstract 摘要表abuse 滥用职权abuse of tax shelter 滥用避税项目ACCA 特许公认会计师公会accelerated cost recovery system 加速成本收回制度accelerated depreciation method 加速折旧法,快速折旧法acceleration clause 加速偿付条款,提前偿付条款acceptance ①承兑②已承兑票据③验收acceptance bill 承兑票据acceptance register 承兑票据登记簿acceptance sampling 验收抽样access time 存取时间accommodation 融通accommodation bill 融通票据accommodation endorsement 融通背书account ①账户,会计科目②账簿,报表③账目,账项④记账accountability 经营责任,会计责任accountability unit 责任单位Accountancy 《会计》杂志accountancy 会计accountant 会计员,会计师accountant general 会计主任,总会计accounting in charge 主管会计师accountant,s legal liability 会计师的法律责任accountant,s report 会计师报告accountant,s responsibility 会计师职责account form 账户式,账式accounting ①会计②会计学accounting assumption 会计假定,会计假设accounting basis 会计基准,会计基本方法accounting changes 会计变更accounting concept 会计概念accounting control 会计控制accounting convention 会计常规,会计惯例accounting corporation 会计公司accounting cycle 会计循环accounting data 会计数据accounting doctrine 会计信条accounting document 会计凭证accounting elements 会计要素accounting entity 会计主体,会计个体accounting entry 会计分录accounting equation 会计等式accounting event 会计事项accounting exposure 会计暴露,会计暴露风险accounting firm 会计事务所Accounting Hall of Fame 会计名人堂accounting harmonization 会计协调化accounting identity 会计恒等式accounting income 会计收益accounting information 会计信息accounting information system 会计信息系统accounting internationalization 会计国际化accounting journals 会计杂志accounting legislation 会计法规accounting manual 会计手册accounting objective 会计目标accounting period 会计期accounting policies 会计政策accounting postulate 会计假设accounting practice 会计实务accounting principle 会计原则Accounting Principle Board 会计原则委员会accounting procedures 会计程序accounting profession 会计职业,会计专业accounting rate of return 会计收益率accounting records 会计记录,会计簿籍Accounting Review 《会计评论》accounting rules 会计规则Accounting Series Release 《会计公告文件》accounting service 会计服务accounting software 会计软件accounting standard 会计标准,会计准则accounting standardization 会计标准化Accounting Standards Board 会计准则委员会(英)Accounting Standards Committee 会计准则委员会(英) accounting system ①会计制度②会计系统accounting technique 会计技术accounting theory 会计理论accounting transaction 会计业务,会计账务Accounting Trend and Techniques 《会计趋势和会计技术》accounting unit 会计单位accounting valuation 会计计价accounting year 会计年度accounts 会计账簿,会计报表account sales 承销清单,承销报告单accounts payable 应付账款accounts receivable 应收账款accounts receivable aging schedule 应收账款账龄分析表accounts receivable assigned 已转让应收账款accounts receivable collection period 应收账款收款期accounts receivable discounted 已贴现应收账款accounts receivable financing 应收账款筹资,应收账款融资accounts receivable management 应收账款管理accounts receivable turnover 应收账款周转率,应收账款周转次数accretion 增殖accrual basis accounting 应计制会计,权责发生制会计accrued asset 应计资产accrued expense 应计费用accrued liability 应计负债accrued revenue 应计收入accumulated depreciation 累计折旧accumulated dividend 累计股利accumulated earnings tax 累积盈余税,累积收益税accumulation 累积,累计acid test ratio 酸性试验比率acquired company 被盘购公司,被兼并公司acquisition 购置,盘购acquisition accounting 盘购会计acquisition cost 购置成本acquisition decision 购置决策acquisition excess 盘购超支acquisition surplus 盘购盈余across-the-board 全面调整ACT 预交公司税act 法案,法规action 起诉,诉讼active account 活动账户active assets 活动资产activity 业务活动,作业activity account 作业账户activity accounting 作业会计activity ratio 业务活动比率activity variance 业务活动量差异act of bankruptcy 破产法act of company 公司法act of God 天灾,不可抗力actual capital 实际资本actual value 实际价值actual wage 实际工资added value 增值added value statement 增值表added value tax 增值税addition 增置,扩建additional depreciation 附加折旧,补提折旧additional paid-in capital 附加实缴资本additional tax 附加税adequate disclosure 充分披露adjunct account 附加账户adjustable-rate bond 可调整利率债券adjusted gross income 调整后收益总额,调整后所得总额adjusted trial balance 调整后试算表adjusting entry 调整分录adjustment 调整adjustment account 调整账户adjustment bond 调整债券administrative accounting 行政管理会计administrative budget 行政管理预算administrative expense 行政管理费用ADR 资产折旧年限幅度ad valorem tax 从价税advance 预付款,垫付款advance corporation tax 预交公司税advances from customers 预收客户款advance to suppliers 预付货款adventure 投机经营,短期经营adverse opinion 反面意见,否定意见adverse variance 不利差异,逆差advisory services 咨询服务affiliated company 联营公司affiliation 联营after closing trial balance 结账后试算表after cost 售后成本after date 出票后兑付after sight 见票后兑付after-tax 税后AGA 政府会计师联合会age 寿命,账龄,资产使用年限age allowance 年龄减免age analysis 账龄分析agency 代理,代理关系agency commission 代理佣金agency fund 代管基金agenda 议事日程,备忘录agent 代理商,代理人aggregate balance sheet 合并资产负债表aggregate income statement 合并损益表AGI 调整后收益总额,调整后所得总额aging of accounts receivable 应收账款账龄分析aging schedule 账龄表agio 贴水,折价agiotage 汇兑业务,兑换业务AGM 年度股东大会agreement 协议agreement of partnership 合伙协议AICPA 美国注册公共会计师协会AIS 会计信息系统all capital earnings rate 资本总额收益率all-inclusive income concept 总括收益概念allocation 分摊,分配allocation criteria 分配标准allotment ①分配,拨付②分配数,拨付数allowance ①备抵②折让③津贴allowance for bad debts 呆账备抵allowance for depreciation 折旧备抵账户allowance method 备抵法all-purpose financial statement 通用财务报表,通用会计报表alpha risk 阿尔法风险,第一种审计风险altered check 涂改支票alternative accounting methods 可选择性会计方法alternative proposals 替代方案,备选方案amalgamation 企业合并American Accounting Association 美国会计学会American depository receipts 美国银行证券存单,美国银行证券托存收据American Institute of Certified Public Accountants 美国注册会计师协会,美国注册公共会计师协会American option 美式期权American Stock Exchange 美国股票交易所amortization ①摊销②摊还amortized cost 摊余成本amount 金额,合计amount differ 金额不符amount due 到期金额amount of 1 dollar 1元的本利和analysis 分析analyst 分析师analytical review 分析性检查annual audit 年度审计annual closing 年度结账annual general meeting 年度股东大会annualize 按年折算annualized net present value 折算年度净现值annual report 年度报告annuity 年金annuity due 期初年金annuity in advance 预付年金annuity in arrears 迟付年金annuity method of depreciation 年金折旧法antedate 填早日期anticipation 预计,预列anti-dilution clause 防止稀释条款anti-pollution investment 消除污染投资anti-profiteering tax 反暴利税anti-tax avoidance 反避税anti-trust legislation 反拖拉斯立法A/P 应付账款APB 会计原则委员会APB Opinion 《会计原则委员会意见书》Application 申请,申请书applied overhead 已分配间接费用appraisal 估价appraisal capital 评估资本appraisal surplus 估价盈余appraiser 估价员,估价师appreciation 增值appropriated retained earnings 已拨定留存收益,已指定用途留存收益appropriation 拨款,指拨经费appropriation account ①拨款账户②留存收益分配账户appropriation budget 拨款预算approval 核定,审批approved account 核定账户approved bond 核定债券A/R 应收账款arbitrage 套利,套汇arbitrage transaction 套利业务,套汇业务arbitration 仲裁,公断arithmetical error 算术误差arm,s-length price 正常价格,公正价格arm,s-length transaction 一臂之隔交易,正常交易ARR 会计收益率arrears ①拖欠,欠款②迟付arrestment 财产扣押Authur Anderson & Co. 约瑟?安德森会计师事务所,安达信会计师事务所article 文件条文,合同条款articles of incorporation 公司章程articles of partnership 合伙契约articulate 环接articulated concept 环接观念artificial intelligence 人工智能ASB 审计准则委员会ASE 美国股票交易所Asian Development Bank 亚洲开发银行Asian dollar 亚洲美元asking price 索价,卖方报价assessed value 估定价值assessment ①估定,查定②特别税捐,特别摊派税捐asset 资产asset cover 资产担保,资产保证asset depreciation range 资产折旧年限幅度asset-liability view 资产—负债观念asset quality 资产质量asset retirement 资产退役,资产报废asset revaluation 资产重估价asset stripping 资产剥离,资产拆卖asset structure 资产结构asset turnover 资产周转率asset valuation 资产计价assignment of accounts receivable 应收账款转让associated company 联属公司,附属公司Association of Government Accounting 政府会计师协会assumed liability 承担债务,承付债务AT 税后at cost 按成本at par 按票面额,平价at sight 见票兑付,即期兑付attached account 被查封账户attachment 扣押,查封attest 证明,验证attestation 证明书,鉴定书audit 审核,审计auditability 可审核性audit committee 审计委员会audit coverage 审计范围audited financial statement 审定财务报表,审定会计报表audit evidence 审计证据,审计凭证Audit Guides 《审计指南》auditing ①审计②审计学auditing procedure 审计程序auditing process 审计过程auditing standard 审计标准,审计准则Auditing Standards Board 审计准则委员会Auditor 审计员,审计师auditor general 审计主任,总审计auditor,s legal liability 审计师法律责任auditor,s opinion 审计师意见书auditor,s report 审计师报告,查账报告audit program 审计工作计划audit report 审计报告audit risk 审计风险audit sampling 审计抽样audit software 审计软件audit test 审计抽查audit trail 审计脉络,审计线索audit working paper 审计工作底稿authorized capital stock 核定股本,法定股本automated clearing house 自动票据交换所automated teller machine 自动取款机automatic transfer service 自动转账服务available asset 可用资产available inventory 可用存货average balance 平均余额average collection period 平均收款期average cost 平均成本average-cost method 平均成本法average inventory 平均存货,平均库存average life 平均寿命,平均使用年限average payment period (of accounts payable) 应付账款平均付款期average rate of return 平均收益率averages 股票价格平均指数avoidable cost 可避免成本B部back charge 欠费费用back date 倒填日期,填早日期backed bill 背书票据back-end load 后期负担backer ①票据担保人②财务支持人backlog depreciation 欠提折旧back order 欠交订货back pay 欠付工资back tax 欠交税款back-to-back credit 对开信用证back-to-back loan 对销贷款back wardation 倒价backward integration 逆向合并bad check 空头支票bad debt 呆账,呆账账户bad debt account 呆账账户bad debt expense 呆账费用bad debt ratio 呆账比率bad debt recovery 呆账收回bailment 寄销,寄托bailout 抽资bailout period 投资返还期balance ①余额②平衡balance budget 平衡预算balance due 结欠余额balance fund 平衡基金balance of account 账户余额balance of payment 国际收支差额balance of retained earnings 留存收益余额balance sheet 资产负债表balance sheet account 资产负债表账户balance sheet analysis 资产负债表分析balance sheet audit 资产负债表审计balance sheet date 结账日期balance sheet ratio 资产负债表比率balance sheet total 资产负债表总额balloon payment 漂浮式付款bank 银行bank(er,s) acceptance 银行承兑,银行承兑汇票bank balance 银行存款余额bankbook 存折bank charge 银行手续费bank checking account 银行支票账户,银行活期存款账户bank confirmation 银行证明信函bank credit 银行信用,银行信贷bank custody 银行保险库bank draft 银行汇票banker ①银行家②银行bank failure 银行倒闭bank loan 银行贷款bank overdraft 银行透支bank reconciliation statement 银行对账单,银行存款调节表bank reference 银行征信信函bank run 银行挤兑bankruptcy 破产bankruptcy act 破产法bankruptcy cost 破产成本bankruptcy court 破产法院bankruptcy prediction 破产判断Bankruptcy Reform Act of 1978 1978年破产改革法bank transfer 银行汇兑业务,银行转账业务bargain ①合同,谈判②廉价货bargain money 定金bargain purchase option 承租人优先购置权bargain renewed option 承租人优先续租权bargain sale 廉价销售barometers 经济晴雨表,经济指标barometers stock 晴雨表股票barter 以货易货barter transaction 易货业务base 基数base period 基期base price 基价base rate 基础利率base stock 基础存量BASIC 基础语言basic earnings per share 每股基础收益basis 基准basis of accounting 会计基准,会计方法basis of taxation 计税基准basis point 基点basket purchase 整套采购,总价采购batch costing 分批成本计算法batch processing 分批处理,分批数据处理B/D 过次页B/E 汇票BE analysis 损益分界分析,保本分析bear ①承担,负担②卖空者,空头bearer 持票人bearer bond 不记名债券bearer draft 不记名汇票bear interest 附息,负担利息bear market 熊市,下跌行情bear squeeze 榨空头beating the market 战胜股市before-separation cost 分离前成本before-tax income 税前收益Beginners All-purpose Symbolic Instruction Code 基础语言,初学者通用符号指令语言beginning balance 期初余额beginning inventory 期初存货bellwether security 领头证券,龙头证券below par 低于票面价值below the line 线下项目beneficial interest 受益人权益beneficial owner 受益权人beneficiary 受益人,受款人,受赔人benefit ①效益,利益②福利金,津贴benefit-cost analysis 效益成本分析benefit-cost ratio 效益成本比率benefit fund 福利基金benefit in kind 实物福利benefit system 职工福利制度best-efforts agreement 证券尽力推销协议beta coefficient 贝塔系数beta risk 贝塔风险,第二种类型误差betterment 改造投资,改造工程投资B/F 余额承前Bias 偏差,偏向性bid ①买价②投标bid bond 投标保证金bid price ①买方出价,买价②投标价格big bath 巨额冲销Big Board 大证券交易所Big Five 五大会计师事务所bill ①汇票,票据②通知单,清单③账单,发货票billing 开发票,开账单billing clerk 开票员bill of entry 报关单bill of exchange 汇票bill of lading 提货单,提单bill of materials 用料单bill of sales 销货清单,卖据bills payable 应付票据bills receivable 应收票据B/L 提货单black market 黑市black money 黑钱blank bill of lading 不记名提货单blank check 空白支票blank endorsement 不记名背书blanket mortgage 总括抵押blanket order 总括订货单blanket price 总括价格blind entry 失实分录,未加说明的分录blind purchase 盲目采购blue-chip 蓝筹码股票,热门股票blue-sky laws 蓝天法,股票发行控制法board chairman 董事长board minutes 董事会会议记录board of directors 董事会board of trade 同业公会,商会bond ①债券②保证书,保证金③忠诚保证bond conversion 债券兑换bond discount 债券折价bonded goods 保税货物bonded warehouse 保税仓库bond financing 债券筹资bondholder 债券持有人bond indenture 债券信托契约,债券契约bonding company 忠诚担保公司bond issue cost 债券发行成本bond premium 债券溢价bond rating 评定债券等级bonds outstanding 流通在外债券,未偿付债券bonds payable 应付公司债券bond yield 债券收益率bonus 奖金,红利bonus issue 发行红利股book ①账簿②账面的③记账book audit 账簿审计book balance 账面余额book inventory 账面存货,账面盘存bookkeeper 簿记员,记账员bookkeeping ①簿记,记账②簿记学book of final entry 终结分录账簿book of orginal entry 原始分录账簿book profit 账面利润,账面盈利book rate of return 账面收益率books of accounts 账簿book value 账面价值book value per share 每股账面价值boot 补价borrowing 借贷,借款borrowing power 借款能力bottom line 损益表底线,最终财务成果B/R 应收票据branch 分支机构,分店branch accounting 分支机构会计,分店会计branch current account 分支机构往来账户,分店往来账户branch ledger 分支机构分类账brand name 牌号名称,商标名称breach of contract 违约,违反合同breach of trust 违反信托breakdown 分解,按细目分类break-even analysis 损益分界分析,损益平衡分析break-even chart 损益分界图表,损益平衡图表break-even point 损益分界点,损益平衡点break-up value 拆卖价值bribes and kickbacks 贿赂和回扣bridging loan 过渡性贷款British Accounting Association 英国会计学会broker 经纪人brokerage 经纪人佣金brought down 入次页,过次页brought forward 承前页budget 预算budgetary control 预算控制budget decision 预算决策bugeting 预算编制budget management 预算管理budget variance 预算差异buffer stock 保险库存,缓冲存货bull ①买空②买空者,多头bullion 金银块,金银条bull market 牛市,涨市burden 间接费用burden rate 间接费用率business ①商业,工商业②企业③经营,营业business accounting 企业会计business barometer 工商业指标business combination 企业合并business cycle 商业周期,商业循环business environment 企业环境business failure 经营失败business income 企业收益,营业收益business risk 经营风险,营业风险business segment 企业分部business transaction 企业交易,营业业务business trust 企业经营信托buy and hold decision 购入和持存决策buyer,s credit 买方信贷buying expense 进货费用buyout 收购股权,收购控制股权buy over 收买,贿赂bylaws 公司章程细则by-product 副产品C部CA 特许会计师cable transfer 电汇calculation 计算calculator 计算器calendar year 日历年度call ①期前偿还,期前兑回②催交股款③买方期权callable bond 可提前兑回债券callable preferred stock 可提前兑回优先股call loan 活期拆放贷款call option 股票购买期权call premium 提前兑回溢价call price 提前兑回价格call provision 提前兑回条款cancelable lease 可取消租约cancelled check 注销支票C & F 货价加运费C & I 货价加保险费capacity ①生产能力②偿债能力capacity cost 生产能力成本,经营能力成本capacity to borrow 借款能力capacity to contract 订约能力,订约资格capital 资本金,资本capital account 资本账户capital addition 资本增置capital allowance 资本减免capital and liabilities ratio 资本负债比率capital appreciation 资本升值capital asset 资本性资产capital asset pricing model 资本性资产计价模型capital authorized 额定资本,法定资本capital budget 资本预算capital cost 资本成本capital deficit 资本亏绌capital expenditure 资本支出capital gain 资本利得,资本收益capital impairment 资本减损capital intensive 资本密集capital investment 资本投资capital investment appraisal 资本投资评价capitalization 资本化capitalization of earnings 收益资本化capitalization of interest 利息资本化capitalized value 资本化价值capital lease 资本租赁capital leverage 资本杠杆作用capital loss 资本损失capital maintenance concept 资本保持概念,资本维护概念capital market 资本市场capital market line 资本市场贝塔风险线capital outlay 资本支出capital-output ratio 资本产值比率capital paid-in 实缴股本,投入股本capital rationing 资本分配capital reorganization 资本改组capital reserve 资本公积金capital return 资本收益率,投资回收率capital stock 股本capital stock outstanding 发行股本,流通在外股本capital stock premium 股本溢价capital stock subscriptions 认购股本capital structure 股本结构capital structure decision 资本结构决策capital surplus 资本盈余capital turnover 资本周转率capital verification 资本验证,验资CAPM 资本性资产计价模型carried interest 附带权益carry back 结转前期扣减,移前扣减carrying cost 置存成本,储存成本carrying value ①置存价值②抵押品价值carry over ①结转下期扣减,移后扣减②结转库存,滚存量CASB 成本会计准则委员会cash ①现金②兑现cashability 变现能力cash account 现金账户cash asset 现金资产cash audit 现金审计cash basis accounting 现金收付制会计,收付实现制会计cash bonus 现金红利cash break-even analysis 现金损益分界分析cash budget 现金预算cash cow 现金母牛cash deficit 现金亏绌cash disbursement journal 现金支出日记账cash discount 现金折扣cash dividend 现金股利cash equivalent 现金等价物cash equivalent value 现金等值cash flow ①现金流转②现金流量cash flow statement 现金流转表,现金流量表cash-flow to capital-expenditure ratio 现金流量对资本支出比率cash-flow to total-debt ratio 现金流量对负债总额比率cash forecast 现金预测cashier 出纳员cashier,s check 银行本票cash in transit 在途现金cash journal 现金日记账cash on delivery 货到付现cash on hand 库存现金cash position 现金状况,现金头寸cash receipts journal 现金收入日记账cash records 现金记录cash sale 现金销售cash shortages and overages 现金缺溢cash statement 现金报表cash turnover ratio 现金周转率cash with order 现金订货,订货现金casting 加总,合计casual audit 临时审计CBA 成本效益分析CCA 现时成本会计CD 存款单ceiling 最高限额ceiling price 最高限价central bank 中央银行centralization 集中经营,集权certainty 确定性certainty decision 确定性决策certainty equivalent 确定等值certainty equivalent coefficient 确定等值系数certificate of capital verification 验资证明书certificate of deposit 存款单certificate of incorporation 公司登记执照,公司注册证书certificate of indebtedness 借据certificate of protest 拒付证明书certified accountant 注册会计师certified check 保付支票certified data processor 注册数据处理师certified financial planners 注册财务计划师certified financial statement 已审核财务报表,已审核会计报表certified information system auditor 注册信息系统审计师certified internal auditor 注册内部审计师certified management accountant 注册管理会计师certified public accountant 注册公共会计师certifying officer 签付员chain discount 连锁折扣chain liquidation 连续清算chairman of the board of director 董事长chairman,s report 董事长报告change fund 找零备用金changing prices accounting 物价变动会计charge ①费用②借记,借项③赊账④留置权charge account 赊账,赊账账户charge and discharge statement 信托财产(或遗产)收支报表charge card 付款卡charge off 注销charge sale 赊销charter 执照,许可证chartered accountant 特许会计师chartered financial analyst 特许财务分析师charted financial consultant 特许财务咨询师,特许财务顾问chartist 图表分析专家chart of accounts 账户分类表,会计科目表chattel 动产chattel mortgage 动产抵押check ①支票②检查,核对check and balance system 制约平衡制度,制衡制度check cleaning 支票交换checking account 支票账户,活期存款账户check register 支票登记簿check verification 支票验证chief accountant 总会计,会计主任chief auditor 总审计,审计主任chief cashier 总出纳,出纳主任chief financial officer 财务总裁,财务总经理CHIPS 票据交换所银行内部支付系统chronological book 序时账簿CIF 到岸价格circularization 发函询证circulating asset 流动资产circulating capital 流动资本,流动资金claim 索赔classification of accounts 账户分类表classification of assets 资产分类classification of liabilities 负债分类classification of stockholders, equity 股东产权分类classified common stock 分类普通股classified trial balance 分类试算表claw back 追回税款clean ①不附带保留条件②不附其他单据③不附利息clean bill of exchange 光票汇票clean letter of credit 光票信用证clearance ①结关,报关②票据交换,清算③清仓clearance agent 报关结算代理商clearance sale 清仓减价销售clearing ①票据交换②结算clearing account ①暂记账户,过渡账户②票据交换往来账户clearing house 票据交换所clear-up cause 清理条款clerical error 笔误,记账错误clerk 办事员,职员client 客户,委托人closed account 已结账账户closed-end mutual fund 固定股份互助基金投资公司closely-held company 不公共招股公司closely-held corporation 不公共招股公司closing ①结账②收盘closing adjustment 结账调整,决算调整closing balance 期末余额closing date 结账日期,截止日期closing entry 结账分录closing price 收盘价格closing trial balance 结账试算表CM 贡献毛利,贡献毛益CMA 注册管理会计师CML 资本市场贝塔风险线COBOL 普通商业用语code ①代号,代码②法规,守则Code of Professional Ethics 《职业道德守则》coding 编码coding clerk 编码员coding of accounts 账户编码co-financing 共同融资coin 硬币coinsurance clause 共同保险条款collateral 抵押品,担保品collateral bond 抵押品担保债券,动产担保债券collateral loan 抵押品担保贷款collectibles 收藏物collection agency 收账代理商collection period 收款期collective policy 收账政策collusion 串通舞弊columnar journal 多栏式日记账combination 企业合并combined financial statement 合并财务报表,合并会计报表combined journal and ledger 合并日记分类账,日记总账comfort letter 安慰信函commercial bank 商业银行commercial bill 商业汇票commercial credit 商业信用commercial law 商法commercial paper ①商业票据②流通票据commission 佣金,手续费commitment ①承诺付款②承诺贷款commitment fee 承诺费commodity 商品,货物commodity exchange 商品交易所Common Business Oriented Language 普通商业语言common cost 共同成本common dollar 等值美元common-size statement 共同尺度报表common stock 普通股common stock equivalent 等同普通股Common Stock Index 普通股股票价格指数community of interest 共同权益,共同权益集团commuted value 折算价值company 公司company director 公司董事长company finance 公司财务company law 公司法company reserve 公司公积金company tax 公司税comparability 可比性comparative accounting 比较会计,比较会计学comparative statement 比较财务报表,比较会计报表compensating balance 补偿性存款额,存货抵销余额compensating errors 抵销性错误compensation ①报酬②补偿,赔偿compensatory stock option 补偿性购股权competitive bidding 竞争性投标compilation of financial statement 编辑财务报表,编辑会计报表complete audit 全部审计complete cycle costs 全部周期成本completed contract method 全部完工法complete transaction 完整经济业务complex capital structure 复杂资本结构complex information processing 复杂信息处理compliance audit 符合规章审计compliance test 符合规章抽查,符合性抽查composite break-even point 综合损益分界点composite depreciation 综合折旧composition 偿债协议,债务和解compound amount of 1 dollar 1元的复利终值,1元的本利和compound discount 复贴现,复折现compound entry 复合分录compound interest 复利compound interest method of depreciation 复利折旧法compound value 复利值comprehensive audit 综合审计comprehensive budget 综合预算comprehensive income 综合收益comptroller 审计长,主计长Comptroller General 总审计长compulsory audit 强制审计compulsory liquidation 强制清算COMPUSTAT 电子计算机会计数据库computed price 推算价格computer 电子计算机computer-aided audit 电子计算机辅助审计computer-aided financial management 电子计算机辅助财务管理computer conferencing 电子计算机会议computer fraud 电子计算机舞弊computerized accounting 电算会计化computer network 电子计算机网络,电子计算机互联网络computer software 电子计算机软件concealment 隐瞒,匿报concept 概念conceptual framework 概念构架,概念体系concern 企业,商号concession ①特许,特许权②折让,优惠condensed balance sheet 简明资产负债表condensed income statement 简明损益表conditional acceptance 附加条件承兑conditional bond 附条件债券confidential information 机密信息,机密资料confirmation letter 询证信函,查证信函confirmed letter of credit 保兑信用证confiscated goods 没收货物,充公货物confiscation 没收,充公conflict of interest 公私利益冲突,借公营私conglomerate combination 跨行业企业合并conglomerate company 跨行业公司,集团公司conglomerate financial statement 集团公司财务报表,集团公司会计报表conservatism ①保守性②稳健性consignment 寄销,寄托consignment account 寄销账户consistency 一致性consolidated financial statement 合并财务报表,合并会计报表consolidation 创立合并consolidation goodwill 合并商誉consortium 国际财团,国际银团consortium project 国际财团投资项目constant price 不变价格constant purchase power accounting 不变购买力会计constituent company 子公司,成员公司construction contract accounting 建筑合同会计construction work in process 在建工程constructive dividend 推定股利constructive fraud 推定欺诈constructive receipt 推定收入consular invoice 领事签证发货票consultant 咨询师,顾问consultant fee 咨询费Consultative Committee of Accounting Bodies 会计团体协商委员会consumed cost 耗用成本Consumer Price Index 消费品物价指数Continental European accounting 欧洲大陆会计contingency 意外事项,或有事项contingency account 意外准备账户contingency financial plan 应急财务计划contingent gain 或有收益,或有利得contingent loss 或有损失continuing account 连续账户,结转账户continuing appropriation 连续拨款,连续经费continuing investment 连续投资continuing professional education 专业进修教育,专业连续教育continuing security 连续担保continuity postulate 连续经营假设continuous audit 连续审计continuous budget 连续预算,滚动预算continuous inventory 连续盘存contra account 抵销账户contract 合同contract labor 合同工contractor ①定约人②承包商contract price 合同价格contra entry 对销分录contributed capital 实缴股本contributed capital in excess of par value 实缴股本的股票溢价contribution ①缴入股本②分担费用③贡献毛利④捐献,捐款contribution approach to pricing 贡献毛利法定价contribution margin 献毛益,贡献毛利contribution margin income statement 贡献毛利损益表contribution margin ratio 贡献毛利率contributory pension plan 分担退休金计划control ①控制②管制control account 统制(统驭)账户controllable cost 可控制成本controlled accounts 被统制账户controlled company 受控公司,子公司controller 会计长,主计长controlling company 控制公司controlling-company accounting 控制公司会计controlling interest 控制股权,多数股权convention 惯例,常规conventional accounting 常规会计conventional costing 常规成本计算法conventional income statement 常规损益表conversion ①兑换②换算,折算conversion price 兑换价格conversion rate 兑换率,折算率convertible bond 可兑换债券convertible preferred stock 可兑换优先股conveyance 转让,转让证书cook 窜改账目cooked books 假账coownership company 共有公司coownership of property 共有财产copyright 版权copyright royalty 稿费,版税corporate accounting 公司会计corporate bond 公司债券corporate charter 公司执照corporate finance 公司财务corporate joint venture 合资经营公司,合资公司corporate raider 公司侵夺者corporate readjustment 公司账务重新调整corporate reorganization 公司重组,公司改组Corporate Report 《公司报告》corporate risk 公司风险corporation 公司,股份公司corpus 本金correcting entry 更正分录correspondent ①客户,往来商号②代理银行corruption 贿赂,行贿cost ①成本②耗费,花费cost absorption 成本摊配,成本转并cost accountant 成本会计师cost accounting 成本会计Cost Accounting Standards 《成本会计准则》cost accounts 成本账户cost allocation 成本分摊,成本分配cost analysis 成本分析cost and freight 货价加运费价格cost and insurance 货价加保险费价格cost audit 成本审计cost basis 成本基准cost-benefit analysis 成本效益分析cost center 成本中心cost classification 成本分类cost control 成本控制cost distribution 成本分摊,成本分配cost flow 成本流转costing 成本计算法cost, insurance and freight 到岸价格cost ledger 成本分类账cost object 成本对象cost of capital 资本成本cost of goods manufactured 制造成本,半成品成本cost of good sold 销货成本cost of living adjustment 按生活费用调整cost of sales 销货成本cost or market, whichever is lower 成本与市价孰低法cost-plus pricing 成本加成计价法cost principle 成本原则cost records 成本记录cost report 成本报告cost sheet 成本单,成本计算单cost variance analysis 成本差异分析cost-volume-profit analysis 成本—销量—利润分析counterfeit money 伪造货币countermand 止付,挂失countersign 会签coupon 息票coupon bond 息票债券Court of Bankruptcy 破产法院。

Theory of the Firm: Managerial Behavior,Agency Costs and Ownership StructureMichael C. JensenHarvard Business SchoolandWilliam H. MecklingUniversity of RochesterAbstractThis paper integrates elements from the theory of agency, the theory of property rights and the theory of finance to develop a theory of the ownership structure of the firm. We define the concept of agency costs, show its relationship to the ‘separation and control’issue, investigate the nature of the agency costs generated by the existence of debt and outside equity, demonstrate who bears costs and why, and investigate the Pareto optimality of their existence. We also provide a new definition of the firm, and show how our analysis of the factors influencing the creation and issuance of debt and equity claims is a special case of the supply side of the completeness of markets problem.The directors of such [joint-stock] companies, however, being the managers rather ofother people’s money than of their own, it cannot well be expected, that they shouldwatch over it with the same anxious vigilance with which the partners in a privatecopartnery frequently watch over their own. Like the stewards of a rich man, they are aptto consider attention to small matters as not for their master’s honour, and very easily give themselves a dispensation from having it. Negligence and profusion, therefore, mustalways prevail, more or less, in the management of the affairs of such a company.—Adam Smith (1776) Keywords: Agency costs and theory, itnernal control systems, conflicts of interest, capital structure, internal equity, outside equity, demand for security analysis, completeness of markets, supply of claims, limited liability©1976 Jensen and MecklingJournal of Financial Economics, October, 1976, V.3, No. 4, pp. 305-360.Reprinted in Michael C. Jensen, A Theory of the Firm: Governance,Also published in Foundations of Organizational Strategy,Michael C. Jensen, Harvard University Press, 1998.This document is available on theTheory of the Firm: Managerial Behavior,Agency Costs and Ownership StructureMichael C. JensenHarvard Business SchoolandWilliam H. Meckling*University of Rochester1. Introduction1.1.Motivation of the PaperIn this paper we draw on recent progress in the theory of (1) property rights, (2) agency, and (3) finance to develop a theory of ownership structure1 for the firm. In addition to tying together elements of the theory of each of these three areas, our analysis casts new light on and has implications for a variety of issues in the professional and popular literature including the definition of the firm, the “separation of ownership and control,” the “social responsibility” of business, the definition of a “corporate objective function,” the determination of an optimal capital structure, the specification of the content of credit agreements, the theory of organizations, and the supply side of the completeness of markets problems.1 We do not use the term ‘capital structure’ because that term usually denotes the relative quantities of bonds, equity, warrants, trade credit, etc., which represent the liabilities of a firm. Our theory implies there is another important dimension to this problem—namely the relative amount of ownership claims held by insiders (management) and outsiders (investors with no direct role in the management of the firm).* Associate Professor and Dean, respectively, Graduate School of Management, University of Rochester. An earlier version of this paper was presented at the Conference on Analysis and Ideology, Interlaken, Switzerland, June 1974, sponsored by the Center for Research in Government Policy and Business at the University of Rochester, Graduate School of Management. We are indebted to F. Black, E. Fama, R. Ibbotson, W. Klein, M. Rozeff, R. Weil, O. Williamson, an anonymous referee, and to our colleagues and members of the Finance Workshop at the University of Rochester for their comments and criticisms, in particular G. Benston, M. Canes, D. Henderson, K. Leffler, J. Long, C. Smith, R. Thompson, R. Watts, and J. Zimmerman.Our theory helps explain:1.why an entrepreneur or manager in a firm which has a mixed financial structure(containing both debt and outside equity claims) will choose a set of activities for the firm such that the total value of the firm is less than it would be if he were the sole owner and why this result is independent of whether the firm operates in monopolistic or competitive product or factor markets;2.why his failure to maximize the value of the firm is perfectly consistent withefficiency;3.why the sale of common stock is a viable source of capital even though managers donot literally maximize the value of the firm;4.why debt was relied upon as a source of capital before debt financing offered any taxadvantage relative to equity;5.why preferred stock would be issued;6.why accounting reports would be provided voluntarily to creditors and stockholders,and why independent auditors would be engaged by management to testify to the accuracy and correctness of such reports;7.why lenders often place restrictions on the activities of firms to whom they lend, andwhy firms would themselves be led to suggest the imposition of such restrictions;8.why some industries are characterized by owner-operated firms whose sole outsidesource of capital is borrowing;9.why highly regulated industries such as public utilities or banks will have higher debtequity ratios for equivalent levels of risk than the average nonregulated firm;10.why security analysis can be socially productive even if it does not increase portfolioreturns to investors.1.2Theory of the Firm: An Empty Box?While the literature of economics is replete with references to the “theory of the firm,”the material generally subsumed under that heading is not actually a theory of the firm but rather a theory of markets in which firms are important actors. The firm is a “black box” operated so as to meet the relevant marginal conditions with respect to inputs and outputs, thereby maximizing profits, or more accurately, present value. Except for a few recent and tentative steps, however, we have no theory which explains how the conflicting objectives of the individual participants are brought into equilibrium so as to yield this result. The limitations of this black box view of the firm have been cited by Adam Smith and Alfred Marshall, among others. More recently, popular and professional debates over the “social responsibility” of corporations, the separation of ownership and control, and the rash of reviews of the literature on the “theory of the firm” have evidenced continuing concern with these issues.2A number of major attempts have been made during recent years to construct a theory of the firm by substituting other models for profit or value maximization, with each attempt motivated by a conviction that the latter is inadequate to explain managerial behavior in large corporations.3 Some of these reformulation attempts have rejected the fundamental principle of maximizing2 Reviews of this literature are given by Peterson (1965), Alchian (1965, 1968), Machlup (1967), Shubik (1970), Cyert and Hedrick (1972), Branch (1973), Preston (1975).3 See Williamson (1964, 1970, 1975), Marris (1964), Baumol (1959), Penrose (1958), and Cyert and March (1963). Thorough reviews of these and other contributions are given by Machlup (1967) and Alchian (1965).Simon (1955) developed a model of human choice incorporating information (search) and computational costs which also has important implications for the behavior of managers. Unfortunately, Simon’s work has often been misinterpreted as a denial of maximizing behavior, and misused, especially in the marketing and behavioral science literature. His later use of the term “satisficing” (Simon, 1959) has undoubtedly contributed to this confusion because it suggests rejection of maximizing behavior rather than maximization subject to costs of information and of decision making.behavior as well as rejecting the more specific profit-maximizing model. We retain the notion of maximizing behavior on the part of all individuals in the analysis that follows.41.3Property RightsAn independent stream of research with important implications for the theory of the firm has been stimulated by the pioneering work of Coase, and extended by Alchian, Demsetz, and others.5 A comprehensive survey of this literature is given by Furubotn and Pejovich (1972). While the focus of this research has been “property rights”,6 the subject matter encompassed is far broader than that term suggests. What is important for the problems addressed here is that specification of individual rights determines how costs and rewards will be allocated among the participants in any organization. Since the specification of rights is generally affected through contracting (implicit as well as explicit), individual behavior in organizations, including the behavior of managers, will depend upon the nature of these contracts. We focus in this paper on the behavioral implications of the property rights specified in the contracts between the owners and managers of the firm.1.4Agency CostsMany problems associated with the inadequacy of the current theory of the firm can also be viewed as special cases of the theory of agency relationships in which there is a growing4 See Meckling (1976) for a discussion of the fundamental importance of the assumption of resourceful, evaluative, maximizing behavior on the part of individuals in the development of theory. Klein (1976) takes an approach similar to the one we embark on in this paper in his review of the theory of the firm and the law.5 See Coase (1937, 1959, 1960), Alchian (1965, 1968), Alchian and Kessel (1962), Demsetz (1967), Alchian and Demsetz (1972), Monson and Downs (1965), Silver and Auster (1969), and McManus (1975).6 Property rights are of course human rights, i.e., rights which are possessed by human beings. The introduction of the wholly false distinction between property rights and human rights in many policy discussions is surely one of the all time great semantic flimflams.literature.7 This literature has developed independently of the property rights literature even though the problems with which it is concerned are similar; the approaches are in fact highly complementary to each other.We define an agency relationship as a contract under which one or more persons (the principal(s)) engage another person (the agent) to perform some service on their behalf which involves delegating some decision making authority to the agent. If both parties to the relationship are utility maximizers, there is good reason to believe that the agent will not always act in the best interests of the principal. The principal can limit divergences from his interest by establishing appropriate incentives for the agent and by incurring monitoring costs designed to limit the aberrant activities of the agent. In addition in some situations it will pay the agent to expend resources (bonding costs) to guarantee that he will not take certain actions which would harm the principal or to ensure that the principal will be compensated if he does take such actions. However, it is generally impossible for the principal or the agent at zero cost to ensure that the agent will make optimal decisions from the principal’s viewpoint. In most agency relationships the principal and the agent will incur positive monitoring and bonding costs (non-pecuniary as well as pecuniary), and in addition there will be some divergence between the agent’s decisions8 and those decisions which would maximize the welfare of the principal. The dollar equivalent of the reduction in welfare experienced by the principal as a result of this divergence is also a cost of the agency relationship, and we refer to this latter cost as the “residual loss.” We define agency costs as the sum of:7 Cf. Berhold (1971), Ross (1973, 1974a), Wilson (1968, 1969), and Heckerman (1975).8 Given the optimal monitoring and bonding activities by the principal and agent.1.the monitoring expenditures by the principal,92.the bonding expenditures by the agent,3.the residual loss.Note also that agency costs arise in any situation involving cooperative effort (such as the co-authoring of this paper) by two or more people even though there is no clear-cut principal-agent relationship. Viewed in this light it is clear that our definition of agency costs and their importance to the theory of the firm bears a close relationship to the problem of shirking and monitoring of team production which Alchian and Demsetz (1972) raise in their paper on the theory of the firm.Since the relationship between the stockholders and the managers of a corporation fits the definition of a pure agency relationship, it should come as no surprise to discover that the issues associated with the “separation of ownership and control” in the modern diffuse ownership corporation are intimately associated with the general problem of agency. We show below that an explanation of why and how the agency costs generated by the corporate form are born leads to a theory of the ownership (or capital) structure of the firm.Before moving on, however, it is worthwhile to point out the generality of the agency problem. The problem of inducing an “agent” to behave as if he were maximizing the “principal’s” welfare is quite general. It exists in all organizations and in all cooperative efforts—at every level of management in firms,10 in universities, in mutual companies, in cooperatives, in9 As it is used in this paper the term monitoring includes more than just measuring or observing the behavior of the agent. It includes efforts on the part of the principal to ‘control’ the behavior of the agent through budget restrictions, compensation policies, operating rules, etc.10 As we show below the existence of positive monitoring and bonding costs will result in the manager of a corporation possessing control over some resources which he can allocate (within certain constraints) to satisfy his own preferences. However, to the extent that he must obtain the cooperation of others in order to carry out his tasks (such as divisional vice presidents) and to the extent that he cannot control their behavior perfectly and costlessly they will be able to appropriate some of these resources for their own ends. In short, there are agency costs generated at every level of the organization. Unfortunately, the analysis of these more general organizational issues is even more difficult than that of the ‘ownership andgovernmental authorities and bureaus, in unions, and in relationships normally classified as agency relationships such as those common in the performing arts and the market for real estate. The development of theories to explain the form which agency costs take in each of these situations (where the contractual relations differ significantly), and how and why they are born will lead to a rich theory of organizations which is now lacking in economics and the social sciences generally. We confine our attention in this paper to only a small part of this general problem—the analysis of agency costs generated by the contractual arrangements between the owners and top management of the corporation.Our approach to the agency problem here differs fundamentally from most of the existing literature. That literature focuses almost exclusively on the normative aspects of the agency relationship; that is, how to structure the contractual relation (including compensation incentives) between the principal and agent to provide appropriate incentives for the agent to make choices which will maximize the principal’s welfare, given that uncertainty and imperfect monitoring exist. We focus almost entirely on the positive aspects of the theory. That is, we assume individuals solve these normative problems, and given that only stocks and bonds can be issued as claims, we investigate the incentives faced by each of the parties and the elements entering into the determination of the equilibrium contractual form characterizing the relationship between the manager (i.e., agent) of the firm and the outside equity and debt holders (i.e., principals).1.5General Comments on the Definition of the firmRonald Coase in his seminal paper entitled “The Nature of the Firm” (1937) pointed out that economics had no positive theory to determine the bounds of the firm. He characterized thecontrol’ issue because the nature of the contractual obligations and rights of the parties are much more varied and generally not as well specified in explicit contractual arrangements. Nevertheless, they exist and we believe that extensions of our analysis in these directions show promise of producing insights into a viable theory of organization.bounds of the firm as that range of exchanges over which the market system was suppressed and where resource allocation was accomplished instead by authority and direction. He focused on the cost of using markets to effect contracts and exchanges and argued that activities would be included within the firm whenever the costs of using markets were greater than the costs of using direct authority. Alchian and Demsetz (1972) object to the notion that activities within the firm are governed by authority, and correctly emphasize the role of contracts as a vehicle for voluntary exchange. They emphasize the role of monitoring in situations in which there is joint input or team production.11 We are sympathetic to with the importance they attach to monitoring, but we believe the emphasis that Alchian and Demsetz place on joint input production is too narrow and therefore misleading. Contractual relations are the essence of the firm, not only with employees but with suppliers, customers, creditors, and so on. The problem of agency costs and monitoring exists for all of these contracts, independent of whether there is joint production in their sense; i.e., joint production can explain only a small fraction of the behavior of individuals associated with a firm.It is important to recognize that most organizations are simply legal fictions12 which serve as a nexus for a set of contracting relationships among individuals. This includes firms, non-profit institutions such as universities, hospitals, and foundations, mutual organizations such as mutual savings banks and insurance companies and co-operatives, some private clubs, and even governmental bodies such as cities, states, and the federal government, government enterprises such as TVA, the Post Office, transit systems, and so forth.11 They define the classical capitalist firm as a contractual organization of inputs in which there is ‘(a) joint input production, (b) several input owners, (c) one party who is common to all the contracts of the joint inputs, (d) who has rights to renegotiate any input’s contract independently of contracts with other input owners, (e) who holds the residual claim, and (f) who has the right to sell his contractual residual status.’12 By legal fiction we mean the artificial construct under the law which allows certain organizations to be treated as individuals.The private corporation or firm is simply one form of legal fiction which serves as a nexus for contracting relationships and which is also characterized by the existence of divisible residual claims on the assets and cash flows of the organization which can generally be sold without permission of the other contracting individuals. Although this definition of the firm has little substantive content, emphasizing the essential contractual nature of firms and other organizations focuses attention on a crucial set of questions—why particular sets of contractual relations arise for various types of organizations, what the consequences of these contractual relations are, and how they are affected by changes exogenous to the organization. Viewed this way, it makes little or no sense to try to distinguish those things that are “inside” the firm (or any other organization) from those things that are “outside” of it. There is in a very real sense only a multitude of complex relationships (i.e., contracts) between the legal fiction (the firm) and the owners of labor, material and capital inputs and the consumers of output.13Viewing the firm as the nexus of a set of contracting relationships among individuals also serves to make it clear that the personalization of the firm implied by asking questions such as “what should be the objective function of the firm?” or “does the firm have a social responsibility?” is seriously misleading. The firm is not an individual. It is a legal fiction which serves as a focus for a complex process in which the conflicting objectives of individuals (some of whom may “represent” other organizations) are brought into equilibrium within a framework of contractual relations. In this sense the “behavior” of the firm is like the behavior of a market, that is, the outcome of a complex equilibrium process. We seldom fall into the trap of characterizing13 For example, we ordinarily think of a product as leaving the firm at the time it is sold, but implicitly or explicitly such sales generally carry with them continuing contracts between the firm and the buyer. If the product does not perform as expected the buyer often can and does have a right to satisfaction. Explicit evidence that such implicit contracts do exist is the practice we occasionally observe of specific provision that ‘all sales are final.’the wheat or stock market as an individual, but we often make this error by thinking about organizations as if they were persons with motivations and intentions.141.6 Overview of the PaperWe develop our theory in stages. Sections 2 and 4 provide analyses of the agency costs of equity and debt respectively. These form the major foundation of the theory. In Section 3, we pose some questions regarding the existence of the corporate form of organization and examines the role of limited liability. Section 5 provides a synthesis of the basic concepts derived in sections 2-4 into a theory of the corporate ownership structure which takes account of the trade-offs available to the entrepreneur-manager between inside and outside equity and debt. Some qualifications and extensions of the analysis are discussed in section 6, and section 7 contains a brief summary and conclusions.2. The Agency Costs of Outside Equity2.1OverviewIn this section we analyze the effect of outside equity on agency costs by comparing the behavior of a manager when he owns 100 percent of the residual claims on a firm with his behavior when he sells off a portion of those claims to outsiders. If a wholly-owned firm is managed by the owner, he will make operating decisions that maximize his utility. These decisions14 This view of the firm points up the important role which the legal system and the law play in social organizations, especially, the organization of economic activity. Statutory laws sets bounds on the kinds of contracts into which individuals and organizations may enter without risking criminal prosecution. The police powers of the state are available and used to enforce performance of contracts or to enforce the collection of damages for non-performance. The courts adjudicate conflicts between contracting parties and establish precedents which form the body of common law. All of these government activities affect both the kinds of contracts executed and the extent to which contracting is relied upon. This in turn determines the usefulness, productivity, profitability and viability of various forms of organization. Moreover, new laws as well as court decisions often can and do change the rights of contracting parties ex post, and they can and do serve as a vehicle for redistribution of wealth. An analysis of some of the implications of these facts is contained in Jensen and Meckling (1978) and we shall not pursue them here.will involve not only the benefits he derives from pecuniary returns but also the utility generated by various non-pecuniary aspects of his entrepreneurial activities such as the physical appointments of the office, the attractiveness of the office staff, the level of employee discipline, the kind and amount of charitable contributions, personal relations (“friendship,” “respect,” and so on) with employees, a larger than optimal computer to play with, or purchase of production inputs from friends. The optimum mix (in the absence of taxes) of the various pecuniary and non-pecuniary benefits is achieved when the marginal utility derived from an additional dollar of expenditure (measured net of any productive effects) is equal for each non-pecuniary item and equal to the marginal utility derived from an additional dollar of after-tax purchasing power (wealth).If the owner-manager sells equity claims on the corporation which are identical to his own (i.e., which share proportionately in the profits of the firm and have limited liability), agency costs will be generated by the divergence between his interest and those of the outside shareholders, since he will then bear only a fraction of the costs of any non-pecuniary benefits he takes out in maximizing his own utility. If the manager owns only 95 percent of the stock, he will expend resources to the point where the marginal utility derived from a dollar’s expenditure of the firm’s resources on such items equals the marginal utility of an additional 95 cents in general purchasing power (i.e., his share of the wealth reduction) and not one dollar. Such activities, on his part, can be limited (but probably not eliminated) by the expenditure of resources on monitoring activities by the outside stockholders. But as we show below, the owner will bear the entire wealth effects of these expected costs so long as the equity market anticipates these effects. Prospective minority shareholders will realize that the owner-manager’s interests will diverge somewhat from theirs; hence the price which they will pay for shares will reflect the monitoring costs and the effect of the divergence between the manager’s interest and theirs. Nevertheless, ignoring for the moment the possibility of borrowing against his wealth, the owner will find it desirable to bear these costsas long as the welfare increment he experiences from converting his claims on the firm into general purchasing power15 is large enough to offset them.As the owner-manager’s fraction of the equity falls, his fractional claim on the outcomes falls and this will tend to encourage him to appropriate larger amounts of the corporate resources in the form of perquisites. This also makes it desirable for the minority shareholders to expend more resources in monitoring his behavior. Thus, the wealth costs to the owner of obtaining additional cash in the equity markets rise as his fractional ownership falls.We shall continue to characterize the agency conflict between the owner-manager and outside shareholders as deriving from the manager’s tendency to appropriate perquisites out of the firm’s resources for his own consumption. However, we do not mean to leave the impression that this is the only or even the most important source of conflict. Indeed, it is likely that the most important conflict arises from the fact that as the manager’s ownership claim falls, his incentive to devote significant effort to creative activities such as searching out new profitable ventures falls. He may in fact avoid such ventures simply because it requires too much trouble or effort on his part to manage or to learn about new technologies. Avoidance of these personal costs and the anxieties that go with them also represent a source of on-the-job utility to him and it can result in the value of the firm being substantially lower than it otherwise could be.2.2A Simple Formal Analysis of the Sources of Agency Costs of Equity and Who Bears ThemIn order to develop some structure for the analysis to follow we make two sets of assumptions. The first set (permanent assumptions) are those which will carry through almost all of the analysis in sections 2-5. The effects of relaxing some of these are discussed in section 6.15 For use in consumption, for the diversification of his wealth, or more importantly, for the financing of ‘profitable’ projects which he could not otherwise finance out of his personal wealth. We deal with these issues below after having developed some of the elementary analytical tools necessary to their solution.。

资本结构代理成本外文翻译文献(文档含中英文对照即英文原文和中文翻译)原文：The Impact of Capital Structure on Agency Costs[Abstract] This paper aims to provide empirical evidence on the agency costs hypothesis which suggests that increase of leverage may reduce agency costs. Both multivariate tests and univariate tests are employed in this study. The multivariate tests reveal that general relationship between leverage and agency costs is significantly negative. Univariate tests are further used to assess whether agency costs are significantly different when a firm has a relatively higher debt to asset ratio from when it is less leveraged. Similar supporting evidence is found for the agency costs hypothesis. Moreover, results from the univariate tests also indicate that this general negativerelationship no longer holds when an extremely high level of leverage is present.[Keywords] Agency costs, Leverage, Agency costs hypothesis, and Opposite effect1. IntroductionIn their seminal work, Jensen and Meckling (1976) point out that agency costs occur due to incomplete alignment of the agent’s and the owner’s interests. The separation of ownership and control may generate agency costs. Two types of agency costs are identified in the paper by Jensen and Meckling (1976): agency costs derived from conflicts between outside equity holders and owner-managers, and conflicts between equity holders and debt holders. From then on, a great amount of research has been devoted to demonstrate the interaction between agency costs and financial decisions, governance decisions, dividend policy, and capital structure decisions.Much empirical evidence collected by researchers, for example, Ang et al. (2000), and Fleming et al. (2005), shows that agency costs generated from the conflicts between outside equity holders and owner-manager could be reduced by increasing the owner-managers’ proportion in equity, i.e., agency costs vary inversely with the manager’s ownership. However, the conflicts between equity holders and debt holders would be more complicated. Theoretically, Jensen and Meckling (1976) argue that there should be an optimal capital structure, under which the lowest agency costs of a firm can be deduced from an independent variable --- “the ratio of outside equity to the whole outside financing”. The locus of agency costs, which is equal to agency costs of outside equity and the ones of debt, would be a convex curve. This implies that agency costs should not be monotonic any more.Some researchers such as Grossman and Hart (1982); Williams (1987), argue that high leverage reduces agency costs and increases firm value byencouraging managers to act more in the interests of equity holders. This argument is known as the agency costs hypothesis. Higher leverage may reduce agency costs through the monitoring activities by debt holders (Ang et al., 2000), the threat of liquidation which may cause managers to lose reputation, salaries, etc. (William, 1987), pressure to generate cash flow for the payment of interest expenses (Jensen 1986), and curtailment of overinvestment (Harvey et al., 2004).However, as the proportion of debt in the capital structure increases beyond a certain point, the opposite effect of leverage on agency costs may occur (Altman, 1984 and Titman, 1984). When leverage becomes relatively high, further increases may generate significant agency costs. Three reasons are identified in the literature which can cause this opposite effect: first reason is the increase of bankruptcy costs (Titman 1984). Second reason is that managers may reduce their effort to control risk which result in higher expected costs of financial distress, bankruptcy, or liquidation (Berger and Bonaccorsi di Patti, 2005). Finally, inefficient use of excessive cash used by managers for empire building would also increase agency costs (Jensen, 1986).2. Literature ReviewJensen and Meckling (1976) identify agency costs derived from conflicts between equity holders and owner-managers as “residual loss” which means agent consumes various pecuniary and non-pecuniary benefits from the firm to maximize his own utility. Related to this issue, Harris & Raviv (1990), Childs et al. (2005) and Lee et al. (2004) argue that managers always want to continue firm’s current operations even if liquidation of the firm is preferred by investors. Also, Stulz (1990), Alvarez et al. (2006) and Kent et al. (2004) suggest the manager always want to invest all available funds even if paying out cash is better for outside shareholders, and conflictbetween the manager and equity holders cannot be resolved through contracts based on cash flows and investment expenditures.Agency theory becomes more complicated when debt holders’ interest is considered. As a financing strategy, debt is widely discussed in capital structure literatures. Modigliani and Miller (1963) demonstrate that in order to raise the value of a firm, the amount of debt financing should be as big as possible for tax subsidyii. However, their theory ignores the agency costs of debt. Theoretically, Jensen and Meckling (1976) point out that the optimal utilization of debt is when the debt is utilized to the point where marginal wealth benefits of the tax subsidy are just equal to the marginal wealth effects of agency costs.A number of researchers focus on the issue of improvement of firm efficiency by reducing agency costs. Some of them focus on the methods to control managers’ behaviors. For instance, Fama (1980) conducts a discussion of how the pressure from managerial labor markets helps to discipline managers. He points out that the key condition to acquire absolute control of managerial behavior through wage adjustments is that the weight of the wage revision process is sufficient enough to resolve any potential managerial incentives problems. Another example is Chance’s (1997) argument on a derivate substitution of executive compensation. He suggests giving the manager stocks without right to vote, which could be beneficial in preventing an executive from wielding too much control. Other researchers are interested in the optimal capital structure under which value of firms could be maximized while agency costs could be minimized. Based on these observations, the agency costs hypothesis stating that the leverage affects agency costs is put forward.Jensen and Meckling (1976) argue that monitoring activities by debt holders will tend to increase the optimal level of monitoring and thereforewill increase the marginal benefits. What’s more, banks which are one of the major sources of external funds especially for small firms also play a crucial role in monitoring the activities of managers.However, as suggested by Jensen and Meckling (1976), the effect of leverage on total agency costs could not be monotoniciii. When the proportion of debt in total capital increases beyond a certain point, the loss would increase due to negative net present value projects, and the firm will not be able to meet current payments on a debt obligation, thus bankruptcy will occur (Terje et al. 2006). Although Haugen and Senbet (1978) argue that bankruptcy cos ts are an insignificant determinant of a firm’s capital structure, Altman (1984) finds that indirect costs associated with bankruptcy are not insignificant when these costs are accounted for the first time. Titman (1984) gives a possible theoretical link between liquidation and capital structure. It links the potentially substantial costs associated with liquidation with the event of bankruptcy. Furthermore, Berger and Bonaccorsi di Patti (2005) suggest that in highly leveraged firms, managers may shift risk or reduce effort to control risk which would also result in expected costs of financial stress, bankruptcy, or liquidation. Additionally, inefficient use of excessive cash which is derived from higher than normal leverage level for empire building would also increase agency costs (Jensen, 1986).Therefore, at low level of leverage, increases of leverage will produce positive incentives for managers and reduce total agency costs by reducing the counterpart of external equity. However, after reaching a certain point, where bankruptcy and distress become more likely and the agency costs of outside debt overwhelm the agency costs of outside equity, any further increases in leverage will then result in higher total agency costs.The subject of the measurements of the agency costs magnitude and firm performance has been widely discussed in the literature. Thesemeasurements are usually taken by using ratios fashioned from financial statements or stock market data. Ang et al. (2000) made one of the first attempts to measure the magnitude of agency costs by two ratios from financial statements. First ratio is a proxy for the so-called direct agency costs. In order to facilitate comparisons, it is standardized as operating expenses to sales ratio. Second ratio is a proxy for the loss in revenues attributable to inefficient asset utilization. This type of agency costs is derived from management’s shirking or from poor investment decisions. This ratio is calculated by annual sales to total assets. Berger and Bonaccorsi di Patti (2006) take a different approach and employ profit efficiency as the performance measure. They use profit efficiency, rather than cost efficiency to evaluate the performance of managers, since profit efficiency explains how well managers raise revenues while reduce costs and it processes tighter relationship with the concept of value maximization. Additionally, Saunders et al. (1990); Cole and Mehran (1998) use stock market returns and their volatility to measure agency costs and firm performance.3. Data and MethodologyData used in this study are drawn from Datastream. 323 UK companies are selected from FTSE ALL SHARE index. We choose UK public companies in this study because of three reasons: First, The UK is a country with mature money and capital markets where debt financing is relatively easy to conduct by companies. Second, maximization of shareholders’ wealth is the dominant goal of management in the Anglo-American world which is consistent with the theory this study is based on. Third, data of public companies could reflect the effect of leverage on agency costs more accurately and sensitively especially in the efficient markets like the UK.There are five variables used in this study. Table 1 provides a summary of these variables along with definitions. Following Ang et al. (2000)’s study,we focus on measuring the direct agency costs which is the ratio of operating expenses to sales. This ratio indicates how effectively the firm’s management controls operating expenses and it tends to capture the impact of agency costs such as excessive perquisite consumption. Operating expenses variable here excludes corporate wages, salaries and other labor-related items, interest expense, rent, leasing and hiring expenses, purchases, depreciation and bad assets written off. A series of checks and filters on the data have been conducted to reduce the sample from a maximum of approximately 400iv firms to a final sample of 323 firms for Year 2004 to Year 2005. The top and bottom 5%v are also removed to avoid the possible outlier effect.The measurements of leverage and agency costs are critical. Debt to asset ratio is employed which is total debts divided by total assets. However, we do not differentiate between long-term or short-term debt. Three other variables are considered to control other confounding effects: performance (proxied by return on asset), firm size (proxied by log of sales), and industry classification (13 industry dummies). Note that we include 13 industry dummy variables in this study because the ratio of operating expenses to sales varies across industries due to the varying importance of inventory and fixed assets.译文：关于资本结构中代理成本理论的影响[导言] 本文旨在提供经验证据对代理成本假说这表明增加的杠杆可以减少代理成本。

ACCA P4考试：Static Trade-Off Theory本文由高顿ACCA整理发布，转载请注明出处1 Use of Debt FinanceThe trade-off theory of capital structure refers to the idea that a company chooses how much debt finance to use by balancing the relative costs and benefits of debt.The relevant benefit of debt is the tax shield on interest payments.The relative costs of using debt include:Agency costs—as financial gearing rises, debt contracts include increasingly restrictive covenants (e.g. forcing the firm to stay in low-risk projects or limiting dividend payments). The resulting loss in potential shareholder wealth is referred to as agency costs.Financial distress costs—when stakeholders perceive the level of gearing to be dangerous the firm's cost of operating the business may rise as suppliers refuse credit, staff leave, potential customers lose faith in products sold under warranty or guarantee, etc.Bankruptcy costs—if a firm defaults on its debt it will either incur the costs of going through a capital reconstruction scheme or the costs of being liquidated.2 Comparison With MM and Pecking Order TheoryMM only considered the benefit of using debt (and hence concluded that the firm's value would continuously rise with financial gearing). The static trade-off theory also considers the costs and attempts to explain why, in practice, firms use less debt than expected by MM.The pecking order theory does not suggest that there is an optimal debt-to-equity ratio. However, static trade-off theory suggests that there is an optimal point at which the marginal cost of taking on more debt equals the marginal benefit.3 ConclusionThe conclusion of static trade-off theory is, therefore, that an optimal capital structure does exist and the related cost of capital and valuation graphs would be similar to that of the traditional view. However, the optimal debt-to-equity ratio suggested by static trade-off theory would not necessarily be exactly the same as that of the traditional view of capital structure.更多ACCA资讯请关注高顿ACCA官网：。

The Relationship between Agency Cost and Capital Structure: A study withthe Restriction of Free Cash FlowJunhong ChuDepartment of FinanceZhuhai Campus, Jinan UniversityZhuhai, Guangdong, P. R. Chinajhchu@Abstract—Agency cost theory is an important branch of capital structural theory. Free cash flow has significant impact on agency cost. The combination of research on these two fields would help to build and extend the theoretical system. Based on agency cost theory, the present study firstly categorized the characteristics of free cash flow as well as the statistical methodologies. Furthermore, the existence of investing free cash flow in agency cost was proved by a model. Then free cash flow was introduced into agency cost theory as restriction, the analysis shows that it will change agency cost, in turn, will have an impact on the relationship between agency cost and capital structure, finally, will influence the optimal capital structure point to maintain the equilibrium. Concretely, with the increasing free cash flow, correspondingly, debt proportion will decrease.Keywords-Capital structure, Free cash flow, Agency cost, Non-pecuniary benefitI.I NTRODUCTIONAgency cost theory is an important branch of capital structure theory. In the famous paper “Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure” in 1976, Jensen argues that the ownership of outsiders will generates agency costs [1], [2]. However, Jensen’s model is too perfect to be actualized. In his model, there is an important precondition: the manager-owner can use up all value of the firm as non-pecuniary benefits [3]. While in fact, the value of firm contains many compositions which can’t be abused, so it might be better to introduce a new variable to modify the original model. Free cash flow could be one.Jensen acknowledged the important role of free cash flow himself. He considered that the free cash flow can represent agency costs to a great degree, so in stock market the announcement of free cash flow might lead to explicit price fluctuation. However, he didn’t introduce it into his classical model to provide a reasonable explanation.Figure 1 is the original model in Jensen’s paper. The y-axis V represents the value of firm, and the x-axis F represents consumed, and Uj (j=1,2,3) represents owner’s indifference curves between wealth and non-pecuniary benefits. When the manager-owner has 100 percents of the equity, the slope of VF is -1, the value of the firm will be V* where indifference curve U2 is tangent to VF, and the level of non-pecuniary benefits consumed is F*.Figure 1. The original model of JensenSupposing the owner sells a fraction of the firm, 1-α, and holds α for himself, the slope of constraint line will change to –α. As a result, the deal will bargain on the price of V’ , as shown in the Figure 1, where the line with slope –α tangent the indifference curve on the location of the constraint line. Now the value of the firm is F’, which is lower then F*. AsJensen stated, selling to outsiders brings about the drop of value, which is a kind of agency costs. Jensen called it the agency cost associated with outside equity.In this model, a very important condition is that the manager can choose the level of non-pecuniary benefits “free”, which means every point on the VF is accessible. But in reality, can this condition be fulfilled?II.T HEORY AND P ROPOSITIONSThe value of firm contains several kinds of components, such as real estate, equipment, brand and cash. In these components, only cash can be used by the manager freely. In fact, not all cash could be “freely” used. The part that can be used freely is described as free cash flow. This is the essence of free cash flow. According to this essence, there are several different explicit definitions of free cash flow.Jensen defined that free cash flow is cash flow in excess of that required to fund all projects that have positive net present values when discounted at the relevant cost of capital. HisThis paper is sponsored by the Incubating Program for Outstandingand Creative Talented Youths in Guangdong Colleges and Universities(No.: WYM08050)978-1-4244-5326-9/10/$26.00 ©2010 IEEEdefinition is difficult to be executed in accounting, because there is no way to judge whether a project has net present value when the project is just settled. Rubin used the similar definition with Jensen. Their definition can be expressed as below [4]:FCF1 = INC －TAX －INTEXP －INVEST WhereINC = operating income before depreciation, INCF = financial income, TAX = total income tax,INTEXP = gross interest expense on short- and long-term debt,INVEST = expense on invest activityStandard & Poor Index accounts the free cash flow as pretax profit minus capital expenditure. Many investors use the method of pretax profit plus depreciation and minus capital expenditure, or the cash flow generated by operating activity minus the capital expenditure which is necessary to guarantee the normal operating activity.In research field, the method brought forward by Lehn is widely adopted [5]. He accounts free cash flow as the following expression:FCF2= INC －TAX －INTEXP －PREDIV －COMDIVPREDIV = total amount of preferred dividend requirementon cumulative preferred stock and dividends paid onnoncumulative preferred stock,COMDIV = total dollar amount of dividend declared on common stock This method is adopted in several research works, such as Lang’s [6], Howe’s [7], Doukas’ [8], and Ferdinand’s studies [9]. Except these methods, there are several other widely adopted methods, which would not be enumerated here. The relationship between FCF1 and FCF2 can be displayedin Figure 2. Figure 2. The relationship between FCF1 and FCF2As shown in Figure 2, there are four components: INC INVEST －(PREDIV+COMDIV)－INCI －INCF, INVEST, first, the third, and the fourth component make up FCF1, and the first component and the second component make up FCF2. As the mutual component, the first component represents the part that can be used freely by the manager in any condition, which can be called the “core” of free cash flow.The third, the fourth and the second component represents discrepant request on free cash flow in different conditions. When the manager has enough autonomy on investment decision-making, the cash of invest is the main source of his non-pecuniary benefits, so the cash of investment should be involved in the expression. But when the owner has not enough authority on investment decision-making, the cash of invest is not “free” for the director. T dividend should be paid to the stockholder every year. but if the payment is not obligatory for the firm, then the manager can abuse the cash to get non-pecuniary benefits, so the third component will be involved in. These different conditions lead to different expressions such as FCF1 and FCF2. Considering the condition that both the cash of investment and the cash of dividend are “free” for manager, we can get the expression of free cash flow in this loosest condition:FCF3 = INC + INCF －TAX －INTEXPIf both the cash of investment and the cash of dividend are not “free” for manager, then the expression will change into FCF4 as shown below:FCF4 = INC －TAX －INTEXP －（PREDIV ＋COMDIV ）－INVESTThe expression of FCF3 generalizes the total scope where free cash flow may exist, so we think this expression possesses the universality, and can be applied in different field. In thispaper, the free cash flow means the cash accounted as FCF3, if there is no special comment. Based on the analysis of essence of free cash flow, we know that not all of the firm’s value but only the free cash flow can be used “freely” by the manager, just as the hypothesis brought forward in the first section. Assuming T is the free cash flow held by the firm, according to Jensen’s model, when the fraction of outside-ownership is 1-α, the non-pecuniary benefits of equilibriumpoint is F*, and the value of firm is V*. The non-pecuniary benefits are transferred from the value of firm, so if the transferable value is restricted, then F* might be unreachable.If T>F*, the volume of free cash flow can meet the demand of manager, and the equilibrium will still stay at point of B. When T=F*, the volume of free cash flow will be used up, regardless of the demand of manager. But if T>F*, even all free cash flow used up, the demand of manager hasn’t been fulfilled, and the constraint of free cash flow is restrict, the manager can’t change it, so the non-pecuniary benefits is just the same as the volume of free cash flow, but lower than F*. The relation of free cash flow and F* can be shown in Figure 3: As shown in Figure 3, the x-axis is the volume of free cash flow, and CB 3H 3 represents the shape of relation between free cash flow and the non-pecuniary benefits when the inside ownership is α. B 3 is the turning point, where T equals to theequilibrium demand of non-pecuniary benefits. Before the point of B 3, the shape of line is upwards, with a slope of 1, while behind the point of B 3, the line is horizontal.α1α3α2F1-T-FF 2-TFigure 3. The relationship between free cash flow and F*According to the relationship between free cash flow andnon-pecuniary benefits, we can get the agency cost associatedwith outside equity under the constraint of free cash flow. In ideal condition, free cash flow is the only source of non-pecuniary benefits, and since this constraint is rigid, the manager has no way to loosen this constraint. Then the shape of agency cost should be GNB. However, the ideal condition is very hard to fulfill. When the manager’s demand is not met, he will try his best to find way to increase the non-pecuniarybenefits, though there is the constraint of free cash flow. Thefactual non-pecuniary benefits will be more than the volume of free cash flow, but less than F*, as the curve KN shown in Figure 4. Analogously, when the volume of free cash flow exceeds demand, the excess will lead to the increase of agency cost. So, when the volume of free cash flow is T, the curve of agency costs will be KNG’, which cuts the original curve JNG at point N, where the volume of free cash flow can just meet the manager’s demand.Figure 4. The relationship between agency cost and inside ownershipWhen the curve of agency costs is changed, the conclusionof Jensen’s model should be modified. As shown in Figure 5, A T (K) is the original curve of total agency costs, which is the sum of agency costs associated with outside equity Aso(K) andagency costs associated with debt A B (K). Assuming the A B (K) is an invariable, when Aso(K) changed to Aso(K)’, the curve of total agency costs will change to AT (K)’. The originalequilibrium point is K*, where the total agency costs areminimum.Figure 5 The relationship between agency cost and the proposition of debtAccording to the minimum condition, the differential coefficient of K* should be zero.∗=K K T dK K dA )(＝′=∗′K K T dKK dA )(＝0.Because,A T (K)=A s0(K)+AB (K), A T '(K)=A s0'(K)+A B (K ), the expression can be written as ：∗=K K s dK K dA )(0＝－∗=K K B dKK dA )(；′=∗′K K s dKK dA )(0＝－′=∗K K B dK K dA )(According as the character of agency cost, we know that the differential coefficient of both A s0(K) and A s0'(K) is negative and increases by degrees, and dK K dA s )(0 is smaller than dK K dA s )(0′, so we can get the expression below:∗=′K K s dKK dA )(0>－∗=K K B dKK dA )(；At the point of K*,dK K dA T )(′>0, it implies the point isn’t the minimum point. With the decrease of K, dK K dA s )(0 decreases too, but －dK K dA B )( increases, there must be a point where dK K dA T )(′＝dK K dA s )(0＋dK K dA B )(=0, and it’s the point of K*’.It means, with the constraint of free cash flow, the equilibrium point will move to K*’, where the fraction of outside debt is less than K*. This implies that when the constraint of free cash flow is considered, the firm will choose to borrow less money but sell more equity out than that in ideal condition to obtain optimal utility.Figure 6. The location of equilibrium pointWhen the volume of free cash flow is changing, the location of equilibrium point will keep moving consequently as shown in Figure 6. The direction of moving depends on the slope of total agency costs curve. With the same fraction of outside debt, the slope of A T (K) with higher free cash flow is larger than that with lower free cash flow( the absolute value is less, but the slope is negative), so the equilibrium point will move towards the left direction, staying at a lower fraction ofdebt. This relationship can be described in Figure 7.Figure 7. The relationship between free cash flow and the optimal of debtIII. C ONCLUSIONBased on agency cost theory, the paper firstly categorized the characteristics of free cash flow as well as the statistical methodologies. Considering the situation in reality, free cash flow was introduced into agency cost theory as a constraint. The analysis shows that free cash flow changes agency cost, in turn, haves an impact on the relationship between agency cost and capital structure, finally, influences the optimal capital structure point to maintain the equilibrium. 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