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The non-cyclical nature of the industry is reflected in its low beta of 0.58. From October 28th to December 5th, the stock price declined $4.53, or 23.1%. Over the same period, the S&P 500 dropped from 940.51 to 876.07, a decline of 64.44. That equates to a percentage decline of 6.85%. This indicates that Altria stock declined more substantially over that period than did the overall market. The firms beta, however, would have implied a decline of only 3.97%. Had this decline been experienced, the value of Altria stock on December 5th would have been $18.75. From this we can infer that the decline in Altria stock over this period was not simply a factor of the general market decline, but was a result of firm-specific considerations as well

Indeed, the economic crisis is unlikely to have a significant impact on the operations of Altria. Demand in the tobacco sector is relatively price inelastic. Therefore, consumers who smoke do not view their habit as being optional. Thus, they do not reduce smoking significantly in the face of economic downturn. Thus, the state of the economy is not considered to be a major demand driver for Altrias main business. Indeed,

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