... royalty trusts which reduce taxes and pass cash flows directly through to shareholders, firms in the oil Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers Michael C. Jensen ... Jay Light, Clifford Smith, Wolf Weinhold, and especially Armen Alchian and Richard Ruback. Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers Michael C. Jensen* American Economic ... open corporate form because of Michael C. Jensen 13 1986 growth opportunities and a shortage of free cash flow; but that is a topic for future consideration. The agency cost of free cash...