We investigate the effect of scrutiny (e.g., credit ratings, analyst reports, or mandatory disclosures) on the security design problem of a privately informed issuer. We show that scrutiny has important implications for both the form of security designed and the amount of inefficient retention of cash flows. The model predicts that issuers will design informationally sensitive securities (i.e., levered equity) when scrutiny is sufficiently intense. Otherwise, issuers opt for a standard debt contract. Scrutiny increases efficiency by decreasing issuers' reliance on retention to signal quality and, perhaps counterintuitively, decrease price informativeness.

中文翻译：

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为审查设计证券

我们调查审查（例如，信用评级、分析师报告或强制披露）对私人知情发行人的安全设计问题的影响。我们表明，审查对设计的证券形式和现金流量的低效保留量都有重要影响。该模型预测，当审查足够严格时，发行人将设计信息敏感证券（即杠杆股权）。否则，发行人会选择标准债务合约。审查通过减少发行人对保留信号质量的依赖来提高效率，并且可能违反直觉地降低价格信息量。