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 )
This book is sure to fill a gap in that it gives a comprehensive overview of the theory of corporate finance. It is rich in examples and the interested reader can find numerous references at the end of each chapter.
However, the book is sometimes awkwardly written: sentences are unnecessarily long and the logic of French grammar pops up here and there. A further concern is that models are never presented in a concise way (e.g. as in Mas-Colell, Whinston and Greene: Microeconomic Theory). Why would anyone discuss examples between presenting the objective function and the constraints? Sometimes it takes to read 3 pages to cover a model of 3 equations. This makes reading tiring as the reader might lose track of the actual model as they go through the examples.
In my opinion, the text is aimed at graduate students and in general is good, but the flow of the text should be much-much better.
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.
Altough i am not a corporate finance expert, i have some knowledge of advanced theoretical one.
Now if you need to learn corporate finance even at a phd level as a way to learn how to evaluate projects, how to raise financing, how to deal with mergers and acquisitions, DO NOT buy this book. Its relationship to practice (and may i say relevance to any sort of corporation, i.e. who CFO cares about pecking order hypothesis) resembles the relationship between postmodernism and positivism. This book will not answer those questions, try Dixit and Pindyck instead.
For economists working on that field is a bible
Even a few years ago the theory of corporate finance was relatively simple. To be sure, everyone knew that the models weren't perfect. The close cooperation between favorite trading partners and/or between companies and their governments, the impact of taxes, currency issues, and a whole raft of financing instruments that never existed before has forced drastic changes in the basic theories of corporate financing.
This book employs a single, elementary model in order to illustrate the main economic insights. While this approach doesn't take into account all of the various extentions that more complex models might give, it is much easier for the student to get accustomed to one model and then to modify it as circumstances warrent.
This book is aimed at the advanced undergraduate student, or more likely one at the graduate level. While not nearly as mathematically oriented as some books, this one does include enough that the student should consider calculus as a prerequisite.
All in all, this book does a supurb job of developing a theory that reflects the real world as it exists today.
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.
Product Details :
Hardcover: 640 pages
Publisher: Princeton University Press (December 12, 2005)
Language: English
ISBN-10: 0691125562
ISBN-13: 978-0691125565
Product Dimensions: 8 x 1.6 x 10 inches
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