Product Description

The past twenty years have seen great theoretical and empirical advances in the field of corporate finance. Whereas once the subject addressed mainly the financing of corporations--equity, debt, and valuation--today it also embraces crucial issues of governance, liquidity, risk management, relationships between banks and corporations, and the macroeconomic impact of corporations. However, this progress has left in its wake a jumbled array of concepts and models that students are often hard put to make sense of.

Here, one of the world's leading economists offers a lucid, unified, and comprehensive introduction to modern corporate finance theory. Jean Tirole builds his landmark book around a single model, using an incentive or contract theory approach. Filling a major gap in the field, The Theory of Corporate Finance is an indispensable resource for graduate and advanced undergraduate students as well as researchers of corporate finance, industrial organization, political economy, development, and macroeconomics.

Tirole conveys the organizing principles that structure the analysis of today's key management and public policy issues, such as the reform of corporate governance and auditing; the role of private equity, financial markets, and takeovers; the efficient determination of leverage, dividends, liquidity, and risk management; and the design of managerial incentive packages. He weaves empirical studies into the book's theoretical analysis. And he places the corporation in its broader environment, both microeconomic and macroeconomic, and examines the two-way interaction between the corporate environment and institutions.

Setting a new milestone in the field, The Theory of Corporate Finance will be the authoritative text for years to come.

Product Details

• Amazon Sales Rank: #301647 in Books
• Published on: 2005-12-12
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 640 pages

Review
"A magnificent new book -- It has a plausible claim to be the first truly comprehensive overview of corporate finance". -- The Economist

Review
A magnificent new book. . . . This is far more than the mere textbook it purports to be; it has a plausible claim to be the first truly comprehensive overview of corporate finance by an economist.
(The Economist )

Impeccably systematized. . . . Tirole's book will have a prominent place in my library, and I am sure that I shall have plenty of occasions to refer to its authority in the future. It fully deserves a 'buy' rating.
(Rudi Bogni Times Higher Education Supplement )

Jean Tirole has provided the profession with its first comprehensive, advanced treatment of corporate finance theory. . . . [T]he overall result is far from idiosyncratic and it will have a major impact upon teaching and research in corporate finance.
(David Webb Economic Journal )

Review
Using a single elementary model Tirole brings out with refreshing ease an unsuspected unity and simplicity in a field that might otherwise be perceived as dishearteningly fragmented and complex. This masterful book will be a formidable teaching tool at the graduate level and an essential reference for research in corporate finance.
(Marco Pagano, Professor of Economics, University of Naples Federico II )

Customer Reviews

Good PhD book
This is definitely a good PhD-level book on Corporate Finance. It is based on Jean Tirole's lecture notes at Toulouse and definitely follows his research style. It uses theoretical models with agency problems to explain several empirical findings of corporate finance. A great purchase for grad students interested in financial THEORY.

Superb
Tirole's book is one of the very few formal texts to cover corporate finance theory. It is structured around a few basic models which are changed/extended in myriad ways in order to illuminate this or that topic. This allows the reader to cover a lot of ground with minimal investment.

I have taught a master's level finance course based on the notes that the book is built on and found it a pleasure.

I found it useful to cover some basics of principal agent theory before covering Tirole's material, as some knowledge of information economics is assumed. Laffont and Martimort's book makes the transition smooth as they essentially use the same basic two action two outcome setup as Tirole's first couple of chapters.

I very much doubt that a superior book will appear on the shelves for some time, that is of course, until Tirole decides to update his text some years from now.

A great theoretical reference
I found this book to be a very clear, step-by-step introduction to the fundamental theories of corporate finance. It relies heavily on a simple Investment -> {R,0} payoff model to unify and explain basic theories. You might quibble with this approach, but it proves to be an excellent way of structuring and outlining finance theory in a cogent, step-by-step conceptual framework. I wish they could use it at the MBA level, given the horrendously awful understanding of basic issues that most MBA's have. To be clear, it's definitely a Ph.D. level text, but I'd say it's reasonably accessible to anyone with good math skills and a strong desire to learn the fundamentals of modern financial economics.

As a bonus, it's also relatively cheap. Thanks Jean.