In a recent note in this journal, Professor Levy discussed the relative merits of the payback method and the discounted rate-of-return (IRR) method. In examining the relationship between K (IRR) and Kp (the reciprocal of the payback), he reaffirmed that the two were approximately equal based on the assumption that:(1) annual earnings were the same every year, and(2) , where N is the life of the asset.

The most conspicuous deficiency of my study of underwriting compensation is my failure to examine the determinants of underwriting spreads on tax-exempt bond issues. That deficiency has now been remedied by Richard West. Unfortunately, my study was not published very long before West's and there was little opportunity for him to compare his results and speculation with my own. Although a few of the comments below are critical of West, and I point out some alternative interpretations of his statistical findings, this note should be considered a supplement to, rather than a critique of, West's paper.