You have run a regression of value/sales ratios against operating margins for cosmetics firms:

You are trying to estimate the brand name value of Estée Lauder. The firm earned \($80\) million after interest and after taxes on revenues of \($500\) million. In contrast, GenCosmetics, a manufacturer of generic cosmetics, had an after-tax operating margin of 5%. Estimate the brand name value for Estée Lauder.

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Value/Sales 0.45 + 8.5(After-tax operating margin)