Univeristy of British Columbia. This research was partially supported by a Dean Witter Foundation grant through the Institute of Business and Economic Research, University of California, Berkeley; and a Leslie G. J. Wong Summer Research Grant through the University of British Columbia. The paper was written while E. Schwartz was a visiting assistant professor at the University of California, Berkeley. The authors gratefully acknowledge the helpful comments of Michael J. Brennan and Richard Brealey. The authors retain responsibility for remaining errors.