[[Levered Beta]] is the beta that reflects a capital structure that does include debt. 
The [[Unlevered Beta]] is the [[Beta]] of a company without any debt. Unlevering a beta removes the financial effects from leverage.

<<image /static/files/MBI/Module%2012/leveredbeta.PNG width:600>>

$\Large  \text{Unlevered beta}$ = $\huge \frac{B^L}{1+(1-T_c)*\frac{D}{E}}$

Where:
* $\Large {B^L}$ is the levered, published beta
* $\Large {D}$ is the companies debt
* $\Large {E}$ is the companies equity
* $\Large {T_c}$ is the corporate tax rate.

!!+ The point of the unlevered beta is to ''//remove//'' the debt risk from a publicly known company in a sector comparable to your own company ('unlever the beta') add your own debt risk and 'lever' the beta.

bag
finance_public
created
Fri, 04 Feb 2011 16:53:13 GMT
creator
dirkjan
modified
Fri, 04 Feb 2011 16:53:13 GMT
modifier
dirkjan
tags
M12
Term
creator
dirkjan