Trading Royalties

If you are interested in an entertaining evening with Finance, we would recommend you curl up on the couch with popcorn and watch the classic movie Trading Places. And now you can own a piece of this movie as the royalties from the movie are up for sale. The producer died in 2007 and the current owner of the royalties is selling the future royalty stream. Last year, royalties from the movie generated $7,988. The current bid is $74,700. Royalties generally extend 70 years past death, so there are 58 years left. Assuming the royalty payments stay constant, see if you don't agree that the buyer will earn a 10.66 percent rate of return.