Required return on equity when capital structure is dynamic
将企业的权益必要回报率与其目标债务比率联系起来，发现权益预期回报率取决于实际债务比率与目标值的差距、调整速度以及债务税盾收益与破产成本之差。
Abstract We link the firm's required return on equity to its target debt ratio. We find that a firm's expected return on equity is increasing in the product of the distance between its debt ratio and its target debt ratio, its speed of adjustment, and the spread of the tax benefits of its debt over its bankruptcy costs of debt. Our empirical tests validate the testable implications of our model.