Moh'd, Mahmoud A; Perry, Larry G; Rimbey, James N - In: The Financial Review 30 (1995) 2, pp. 367-85
Agency theory posits that the dividend mechanism provides an incentive for managers to reduce the costs associated with the principal/agent relationship. Distributing resources in the form of cash dividends forces managers to seek outside capital, thus causing them to reduce agency costs as they...