Royalty

AAA

DEFINITION of 'Royalty'

A payment to an owner for the use of property, especially patents, copyrighted works, franchises or natural resources. A royalty payment is made to the legal owner of a property, patent, copyrighted work or franchise by those who wish to make use of it for the purposes of generating revenue or other such desirable activities. In most cases, royalties are designed to compensate the owner for the asset's use, and are legally binding.

INVESTOPEDIA EXPLAINS 'Royalty'

Royalties are often expressed as a percentage of the revenues obtained using the owner's property, but can be negotiated to meet the specific needs of an arrangement. The use of royalties is common in situations where an inventor or original owner chooses to sell their product to a third party in exchange for royalties from the future revenues it may generate.

RELATED TERMS
  1. Solutionary

    Soluble matter comprised of salts, including gypsum, which is ...
  2. Advance Funding

    This refers to any advance made on a future commitment or payment. ...
  3. NR6 Form

    A Canada Revenue Service form that must be submitted by non-residents ...
  4. Carried Interest

    A share of any profits that the general partners of private equity ...
  5. Commission

    A service charge assessed by a broker or investment advisor in ...
  6. Patent

    A government license that gives the holder exclusive rights to ...
Related Articles
  1. Reading The Balance Sheet
    Investing Basics

    Reading The Balance Sheet

  2. Using The Price-To-Book Ratio To Evaluate ...
    Forex Education

    Using The Price-To-Book Ratio To Evaluate ...

  3. Using DCF In Biotech Valuation
    Investing

    Using DCF In Biotech Valuation

  4. Is Buying A Franchise Wise?
    Entrepreneurship

    Is Buying A Franchise Wise?

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center