EXAMINING THE RELATIONSHIP BETWEEN AGENCY COSTS AND STOCK MISPRICING: EVIDENCE FROM THE BAHRAIN STOCK EXCHANGE

摘要: Past studies revealed that there is a strong positive relation between information asymmetry and stock mispricing. However, no direct clear evidence on the relationship agency conflicts andstock Therefore, this study examines costs mispricing in Bahrain Stock Exchange (BSE). We adopt methodology of Pantzalis Park (2014), employ their models multi-dimensional measures to examine relationship. The hypothesizes that: (1) Bahraini companies with higher are more likely show high levels mispricing; (2)Stock BSE which resulted from should be softened (or overstated) by use option grants restricted grants) CEO compensation bundle. Consequently, return data for 50 listed were analyzed examined 8 years period (i.e. 2007 till 2014) using univariate multivariate regression analysis. empirical findings reveal significantly positively related BSE. Further, options, mainly designed resolve interest agents (managers), principals (shareholders), amplify problem incident obvious particularly, when overvalued. Mainly, signify bundles not constructed well could result