Unlevered Beta Calculator

Calculate Unlevered Beta







Formula

The formula to calculate the Unlevered Beta is:

\[ \text{Unlevered Beta} = \frac{\text{Levered Beta}}{1 + (1 - t) \cdot \left(\frac{d}{e}\right)} \]

Where:

What is Unlevered Beta?

Unlevered Beta is a financial metric that analyzes volatility with respect to the overall market. It does this using the levered beta, tax rate, and ratio of debt to equity. The ratio of debt to equity is the key value for this metric.

Example Calculation

Let's assume the following values:

Using the formula to calculate the Unlevered Beta:

\[ \text{Unlevered Beta} = \frac{1.5}{1 + (1 - 0.3) \cdot \left(\frac{200,000}{800,000}\right)} = \frac{1.5}{1 + 0.7 \cdot 0.25} = \frac{1.5}{1 + 0.175} = \frac{1.5}{1.175} \approx 1.28 \]

The Unlevered Beta is approximately 1.28.