Envy. One of the darkest and most powerful emotions. Quite similar to Jealousy, but a little bit meaner. Jealousy refers to insecurity, fear, concern, and anxiety over an anticipated loss of something (usually a person or status) with great personal value. In its original meaning, jealousy is distinct from envy, though the two terms have popularly become synonymous in the English language.
Envy, by definition is an emotion which according to Parrott and Smith, “occurs when a person lacks another’s superior quality, achievement, or possession and either desires it or wishes that the other lacked it”.
As Bertrand Russell said, Envy is one of the most potent causes of unhappiness. Not only is the envious person rendered unhappy by his/her envy, but that person also wishes to inflict misfortune on others. And that is the main difference between Envy and Jealousy.
Also by definition, business world’s structure is based on Envy. If you want to be successful someone else shouldn’t be. Even if you are the best person in the world, in order to succeed someone else who does the same thing you do, must fail. I don’t know if the Envy Ratio is named that way because of what but it definitely makes sense.
What is Envy Ratio? Envy ratio in finance is the ratio of the price paid by investors to that paid by the management team for their respective shares of the equity. This metric is used when considering an opportunity for a management buyout. Managers are often allowed to invest at lower valuation to make their ownership possible and to create a personal financial incentive for them to approve the buyout and to work diligently towards the success of the investment. The envy ratio is somewhat similar to the concept of financial leverage, for managers can increase returns on their investments by using other investors’ money.
The Envy Ratio equation is the one the left. ER is the Envy ratio, INVI the investment by investors, INVE the investor’s equity, INVM is the investment by management and MNE the Manager’s equity. All these are dimensionless.
Go ahead, check this equation and search whatever else you want to solve. You will find some help in our fxSolver video.
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