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The aim of this book is to review recent achievements in the theoretical investigations of the electronic structure, optical, magneto-optical (MO), and x-ray magnetic circular dichroism (XMCD) properties of compounds and Multilayered structures. Chapter 1 of this book is of an introductory character and presents the theoretical foundations of the band theory of solids such as the density functional theory for ground state properties of solids including local density approximation (LDA). It also presents some modifications to the LDA, such as gradient correction, self-interaction correction, LDA+U method, orbital polarization correction, GW approximation, and dynamical mean-field theory. The description of the magneto-optical effects and linear response theory are also presented.