AGENCY COSTS AND DIVIDENDS

Creditors, shareholders and management enter into negotiations for various reasons. Reaching the consensus among all these participants is costly in the sense of difficult finding the best solution for all parties. It is often necessary to choose at best the "second best" solution to ensure compliance. At present, the costs of representation are one of the most significant factors that may affect the market value of the company. The theory states that dividends may reduce the costs of representation. In this context, the article deals with the following conflicts between: 1) shareholders and management, 2) minority and majority shareholders and 3) shareholders and creditors linked to dividends.