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Regulation of cell proliferation, differentiation, and metabolic homeostasis is associated with the phosphorylation and dephosphorylation of specific tyrosine residues of key regulatory proteins. The phosphotyrosine phosphatase 1D (PTP 1D) contains two amino terminally located Src homology 2 (SH2) domains and is similar to the Drosophila corkscrew gene product, which positively regulates the torso tyrosine kinase signal transduction pathway. PTP activity was found to be regulated by physical interaction with a protein tyrosine kinase. PTP 1D did not dephosphorylate receptor tyrosine kinases, despite the fact that it associated with the epidermal growth factor receptor and chimeric receptors containing the extracellular domain of the epidermal growth factor receptor and the cytoplasmic domain of either the HER2-neu, kit-SCF, or platelet-derived growth factor beta (beta PDGF) receptors. PTP 1D was phosphorylated on tyrosine in cells overexpressing the beta PDGF receptor kinase and this tyrosine phosphorylation correlated with an enhancement of its catalytic activity. Thus, protein tyrosine kinases and phosphatases do not simply oppose each other's action; rather, they may work in concert to maintain a fine balance of effector activation needed for the regulation of cell growth and differentiation.

This article empirically tests five structural models of corporate bond pricing: those of Merton (1974), Geske (1977), Longstaff and Schwartz (1995), Leland and Toft (1996), and Collin-Dufresne and Goldstein (2001). We implement the models using a sample of 182 bond prices from firms with simple capital structures during the period 1986-1997. The conventional wisdom is that structural models do not generate spreads as high as those seen in the bond market, and true to expectations, we find that the predicted spreads in our implementation of the Merton model are too low. However, most of the other structural models predict spreads that are too high on average. Nevertheless, accuracy is a problem, as the newer models tend to severely overstate the credit risk of firms with high leverage or volatility and yet suffer from a spread underprediction problem with safer bonds. The Leland and Toft model is an exception in that it overpredicts spreads on most bonds, particularly those with high coupons. More accurate structural models must avoid features that increase the credit risk on the riskier bonds while scarcely affecting the spreads of the safest bonds. The seminal work of Black and Scholes (1973) and Merton (1974) in the area of corporate bond pricing has spawned an enormous theoretical literature on risky debt pricing. One motivating factor for this burgeoning literature is the perception that the Merton model cannot generate sufficiently high-yield spreads to match those observed in the market. Thus the recent theoretical literature includes a variety of extensions and We are grateful to an anonymous referee and especially Ken Singleton and Maureen O'Hara (the editors) for detailed and helpful comments and suggestions. We also thank

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