The royalty relief method is a valuation technique used to estimate the value of intellectual property or brands by calculating the hypothetical royalties that would be paid for the use of that asset if it were licensed to a third party. This approach involves determining the appropriate royalty rate and estimating the future cash flows associated with the asset, ultimately discounting those cash flows to arrive at a present value. This method helps in understanding how much an asset is worth based on its potential to generate income through licensing agreements.
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