pretax operating margin of 16.50 percent. The weighted
average for the sector was roughly 20 percent.
11 The margin each year is computed as follows:
12 Two-thirdsofU.S.firmshavebetasthatfallbetween0.8
and 1.2. That becomes the range for stable-period betas.
13 Ifyouarevaluingacommoditycompanyandassuming
anygrowthratethatexceedsinflation,youareassumingthat
yourfirmwillbranchintootherbusinesses,andyouhaveto
adjust the beta accordingly.