I would value the Designer Brand as $16,970,189.21.
<h3>What is the value of the designer brand?</h3>
The value of the designer brand can be determined using the two-stage FCF growth model.
FCF each year from year 1 to 10 = $550,000
FCF from year 11 = ($550,000 x 1.01) / (0.04 - 0.01) = $18,516,666.67
The present value of the FCF would be determined next:
($550,000 / 1.04) + ($550,000 / 1.04^2) + ($550,000 / 1.04^3) + ($550,000 / 1.04^4) + ($550,000 / 1.04^5) + ($550,000 / 1.04^6) + ($550,000 / 1.04^7) + ($550,000 / 1.04^8) + ($550,000 / 1.04^9) + ($550,000 / 1.04^10) + ( $18,516,666.67 / 1.04^10) = $16,970,189.21
To learn more about FCF, please check: brainly.com/question/8058024
