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Unlevered Beta Formula

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Unlevered Beta is a measure of a company's market risk without the impact of debt, reflecting the volatility of its equity compared to the overall market. Check FAQs

β UL = \frac{β L}{1 + ((1 - t) \cdot (\frac{D}{E}))}

β_UL - Unlevered Beta?β_L - Levered Beta?t - Tax Rate?D - Debt?E - Equity?

Unlevered Beta Example

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With units

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Here is how the Unlevered Beta equation looks like with Values.

Here is how the Unlevered Beta equation looks like with Units.

Here is how the Unlevered Beta equation looks like.

0.3004 = \frac{0.73}{1 + ((1 - 0.35) \cdot (\frac{22000}{10000}))}

0.3004 = \frac{0.73}{1 + ((1 - 0.35) \cdot (\frac{22000}{10000}))}

0.3004 = \frac{0.73}{1 + ((1 - 0.35) \cdot (\frac{22000}{10000}))}

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Unlevered Beta Solution

Follow our step by step solution on how to calculate Unlevered Beta?

FIRST Step Consider the formula

β UL = \frac{β L}{1 + ((1 - t) \cdot (\frac{D}{E}))}

Next Step Substitute values of Variables

∴

β UL = \frac{0.73}{1 + ((1 - 0.35) \cdot (\frac{22000}{10000}))}

Next Step Prepare to Evaluate

∴

β UL = \frac{0.73}{1 + ((1 - 0.35) \cdot (\frac{22000}{10000}))}

Next Step Evaluate

∴

β UL = 0.300411522633745

LAST Step Rounding Answer

∴

β UL = 0.3004

Unlevered Beta Formula Elements

Variables

Unlevered Beta

Unlevered Beta is a measure of a company's market risk without the impact of debt, reflecting the volatility of its equity compared to the overall market.

Symbol: β_UL

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Unlevered Beta

Levered Beta

Levered Beta is a measure of a company's market risk, including the impact of its debt, reflecting the volatility of its equity relative to the overall market.

Symbol: β_L

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Levered Beta

Tax Rate

Tax Rate is the percentage at which an individual or corporation is taxed on their taxable income.

Symbol: t

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Tax Rate

Debt

Debt is the amount of money borrowed by one party from another, typically with the agreement to pay back the principal amount along with interest.

Symbol: D

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Debt

Equity

Equity represents the ownership interest in a company, calculated as the difference between the company's total assets and total liabilities.

Symbol: E

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Equity

Other formulas in Strategic Financial Management category

Go Earnings Yield

EY = (\frac{EPS}{MPS}) \cdot 100

Go Earnings Yield using PE Ratio

EY = (\frac{1}{PE}) \cdot 100

Go Dividend Rate

DR = (\frac{DPS}{CP}) \cdot 100

Go Share Exchange Ratio

ER = \frac{OPTS}{ASP}

How to Evaluate Unlevered Beta?

Unlevered Beta evaluator uses Unlevered Beta = Levered Beta/(1+((1-Tax Rate)*(Debt/Equity))) to evaluate the Unlevered Beta, The Unlevered Beta measures a company's market risk without considering its debt, indicating the volatility of its equity relative to the overall market. Unlevered Beta is denoted by β_UL symbol.

How to evaluate Unlevered Beta using this online evaluator? To use this online evaluator for Unlevered Beta, enter Levered Beta (β_L), Tax Rate (t), Debt (D) & Equity (E) and hit the calculate button.

FAQs on Unlevered Beta

What is the formula to find Unlevered Beta?

The formula of Unlevered Beta is expressed as Unlevered Beta = Levered Beta/(1+((1-Tax Rate)*(Debt/Equity))). Here is an example- 0.622159 = 0.73/(1+((1-0.35)*(22000/10000))).

How to calculate Unlevered Beta?

With Levered Beta (β_L), Tax Rate (t), Debt (D) & Equity (E) we can find Unlevered Beta using the formula - Unlevered Beta = Levered Beta/(1+((1-Tax Rate)*(Debt/Equity))).

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Unlevered Beta Formula

Unlevered Beta Example

Unlevered Beta Solution

Unlevered Beta Formula Elements

Other formulas in Strategic Financial Management category

How to Evaluate Unlevered Beta?

FAQs on Unlevered Beta

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