The book "The Theory of Corporate Finance" by Jean Tirole provides a comprehensive overview of the field, focusing on the economic aspects of corporate finance. It covers various topics including corporate governance, corporate financing, agency costs, liquidity and risk management, and the interaction between corporate finance and product markets. The book is structured into several parts, each addressing different aspects of corporate finance: 1. **An Economic Overview of Corporate Institutions**: This part introduces the key features of corporate governance and financing, including the separation of ownership and control, managerial incentives, the role of the board of directors, investor activism, takeovers, and debt as a governance mechanism. 2. **Corporate Financing and Agency Costs**: This part delves into the financial aspects of corporate finance, discussing the Modigliani-Miller theorem, debt instruments, equity instruments, and financing patterns. It also explores credit rationing, borrowing capacity, and the trade-offs between liquidity and risk management. 3. **Exit and Voice: Passive and Active Monitoring**: This part examines the role of monitors in corporate finance, including the costs and benefits of active monitoring and the impact of monitoring on management behavior. 4. **Security Design: The Control Right View**: This part focuses on the allocation of control rights among insiders and outsiders, and the implications for corporate governance and financial structure. 5. **Macroeconomic Implications and the Political Economy of Finance**: This part discusses the macroeconomic impacts of corporate finance, including credit rationing, mergers and acquisitions, and the role of public policy in shaping corporate finance. The book aims to provide a unified framework for understanding the theoretical and empirical aspects of corporate finance, while also highlighting important topics that are often overlooked in the literature. It is designed to be accessible to graduate students and researchers, with a focus on simplifying complex concepts and providing practical insights.The book "The Theory of Corporate Finance" by Jean Tirole provides a comprehensive overview of the field, focusing on the economic aspects of corporate finance. It covers various topics including corporate governance, corporate financing, agency costs, liquidity and risk management, and the interaction between corporate finance and product markets. The book is structured into several parts, each addressing different aspects of corporate finance: 1. **An Economic Overview of Corporate Institutions**: This part introduces the key features of corporate governance and financing, including the separation of ownership and control, managerial incentives, the role of the board of directors, investor activism, takeovers, and debt as a governance mechanism. 2. **Corporate Financing and Agency Costs**: This part delves into the financial aspects of corporate finance, discussing the Modigliani-Miller theorem, debt instruments, equity instruments, and financing patterns. It also explores credit rationing, borrowing capacity, and the trade-offs between liquidity and risk management. 3. **Exit and Voice: Passive and Active Monitoring**: This part examines the role of monitors in corporate finance, including the costs and benefits of active monitoring and the impact of monitoring on management behavior. 4. **Security Design: The Control Right View**: This part focuses on the allocation of control rights among insiders and outsiders, and the implications for corporate governance and financial structure. 5. **Macroeconomic Implications and the Political Economy of Finance**: This part discusses the macroeconomic impacts of corporate finance, including credit rationing, mergers and acquisitions, and the role of public policy in shaping corporate finance. The book aims to provide a unified framework for understanding the theoretical and empirical aspects of corporate finance, while also highlighting important topics that are often overlooked in the literature. It is designed to be accessible to graduate students and researchers, with a focus on simplifying complex concepts and providing practical insights.