Debt in Industry Equilibrium
研究竞争性行业中企业进入和退出如何影响证券估值和最优资本结构，并推导出企业债务的简单定价公式，其中行业产出的需求价格弹性起关键作用。
This article shows (1) how entry and exit of firms in a competitive industry affect the valuation of securities and optimal capital structure, and (2) how, given a trade-off between tax advantages and agency costs, a firm will optimally adjust its leverage level after it is set up. We derive simple pricing expressions for corporate debt in which the price elasticity of demand for industry output plays a crucial role. When a firm optimally adjusts its leverage over time, we show that total firm value comprises the value of discounted cash flows assuming fixed capital structure, plus a continuum of options for marginal increases in debt.