What is the name of inverse of synergy? (finance)
"You could call it ""multiple streams of income"" a la Robert Allen and others. Or you could call it ""Do once, sell many"" or something like that." I'd probably call it an intangible or indirect benefit. Not sure what the trade term is.
"While I can appreciate you're coming from a strongly held philosophy, I disagree strongly with it.  I do not have any 401k or IRA I don't like that you need to rely on government and keep the money there forever. A 401k and an IRA allows you to work within the IRS rules to allow your gains to grow tax free. Additionally, traditional 401ks and IRAs allow you to deduct income from your taxes, meaning you pay less taxes. Missing out on these benefits because the rules that established them were created by the IRS is very very misguided. Do you refuse to drive a car because you philosophically disagree with speed limits?  I am planning on spending 20k on a new car (paying cash) Paying cash for a new car when you can very likely finance it for under 2% means you are loosing the opportunity to invest that money which can conservatively expect 4% returns annually if invested. Additionally, using dealership financing can often be additional leverage to negotiate a lower purchase price.  If for some reason, you have bad credit or are unable to secure a loan for under 4%, paying cash might be reasonable.  The best thing you have going for you is your low monthly expenses. That is commendable.  If early retirement is your goal, you should consider housing expenses as a part of your overall plan, but I would strongly suggest you start investing that money in stocks instead of a single house, especially when you can rent for such a low rate. A 3 fund portfolio is a classic and simple way to get a diverse portfolio that should see returns in good years and stability in bad years. You can read more about them here: http://www.bogleheads.org/wiki/Three-fund_portfolio You should never invest in individual stocks. People make lots of money to professionally guess what stocks will do better than others, and they are still very often wrong. You should purchase what are sometimes called ""stocks"" but are really very large funds that contain an assortment of stocks blended together. You should also purchase ""bonds"", which again are not individual bonds, but a blend of the entire bond market.  If you want to be very aggressive in your portfolio, go with 100-80% Stocks, the remainder in Bonds. If you are nearing retirement, you should be the inverse, 100-80% bonds, the remainder stocks.  The rule of thumb is that you need 25 times your yearly expenses (including taxes, but minus pension or social security income) invested before you can retire. Since you'll be retiring before age 65, you wont be getting social security, and will need to provide your own health insurance." While many answers correctly cite the effect of monopoly power.... there is a cost issue that no one has yet posted.  I first recall seeing this cost effect in a managerial econ textbook, perhaps Ivan Png's.   The theater must clean up the popcorn mess.  The sales of popcorn elsewhere does not usually include the costs of disposal because that cost is not borne by the vendor.   In a theater the cost of disposal -- which is a variable cost depending on the amount and type of foodstuff sold -- is borne by the vendor, who must pay employees to clean up between shows and at the end of the night.  While most people are responsible with popcorn, there is a long tail of more and more costly messes left by the customer...  and if the theater shirks the cost of cleaning the messes then rats with long tails will bite into future customer demand for tickets. Whether this cost effect is as large as the monopoly power effect and the synergy in willingness-to-pay between entertainment and refreshments is not clear.  All of these effects may be in operation. Take this from someone who didn't study maths after A-levels (got B - not genius level either) and sat CFA level 1 yesterday... If you don't pick maths or minor in maths after Sixth-form/High-school, you will regret down the line. It really is a massive differentiator in any finance field you decide to progress onto later in life.  If I could go back, I would put my name down for Stat, further maths and anything math-related I could learn even though I might not be able to secure gold-plated grades. The fundamentals of it are far more important than anything you learn in class (if you want to excel in finance, analytics, and even startups), and with strong social skills, you will be a rockstar. "That sounds about right. However, and this is just a quibble, it's not 90m notional of swap, or at least I've not heard it expressed quite that way for a total return instrument... generally I hear the word exposure, in this case the # of ""shares"" purchased at a specific index level. So 90mm exposure in S&amp;P 500 at today's closing price is: 90,000,000 / 2411.8 = a swap on 37, 317 shares.  If you want to maintain the 90mm exposure month to month, you will structure the instrument with a ""variable notional"". At each reset, the swap's # of shares will vary inversely with the index level to maintain the 90mm exposure.  You rightly point out that the financing is based on the 90mm figure.  As a final note, the dealer may also guarantee some profit by quoting a spread between the swap's initial index levels, depending on whether the portfolio wants to go long or short the index." Here's the original academic backbone that it's based on and expanded upon.  https://en.m.wikipedia.org/wiki/Modigliani%E2%80%93Miller_theorem  I think thats it's overly conservative in this case (I fully accept academic theories only go so far in the real world) as Damodaran (NYU professor) has made a pretty solid case that cash on balance sheet at large cap tech companies is valued by the markets at less than its after tax $ value. I was looking at NAT and NAO, NAT owns 20% of NAO.  They trade opposite each other on the price of oil, low is good for NAT, bad for NAO.  In bad times the other company's stock would probably rise, so they could trim excess shares to keep a stable monetary holding.  This would create cash in bad times, in good times they could buy more, creating a floor as well for the other. The MIRR formula uses the finance rate to discount negative cash flows, but since the only negative cash flow in the example in in the current period, there's nothing to discount.  It's meant to solve problems with IRR like when there are both positive and negative cash flows, which can result in multiple answers for IRR.  The example they give isn't a good one for MIRR because it's a simple spend now, earn later scenario, which IRR is perfectly fine for. If you add a negative cashflow somewhere after the first one you'll see the answer change with difference financing rates. I was merely trying to be helpful - Conceptually, you have dump this idea that something is skewed. It isn't. Firm A sold for $500 (equity value aka purchase price to shareholders) + debt (zero) - cash (50) for 450.  Enterprise value is the cash free, debt free sale price.  The implied ev multiple is 4.5x on A - that is the answer. The other business sold for a higher multiple of 5x.  If you would pile on more cash onto A, the purchase price would increase, but the EV wouldn't.      The idea is to think hard about the difference between equity value and enterprise value when examining a transaction.