Unlevered Beta Calculator

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Unlever converts a levered (equity) beta to an unlevered (asset) beta by stripping out financial leverage. Relever applies a new D/E ratio to an asset beta.
The observed equity beta of the company, typically from a regression of stock returns against a market index. Available from financial data providers.
The effective or marginal corporate income tax rate. The US federal statutory rate is 21%; combined federal and state averages around 25-26%.
%
Market value of interest-bearing debt (short-term + long-term). If market value is unavailable, book value is an acceptable proxy.
M
Market capitalization: share price multiplied by shares outstanding.
M
Unlevered beta (asset beta)Market-like
1.0286

Beta with the effect of financial leverage stripped out; reflects only operating risk.

Levered beta (relevered)1.35
Debt/Equity ratio0.4167
Leverage adjustment factor1.3125
Risk classificationMarket-like - Moves roughly in line with the market
1.0286
Defensive<0.5Low0.5-0.8Market0.8-1.1Moderate1.1-1.5Aggressive1.5+
Unlevered beta1.0286
Levered beta1.35

Unlevered beta: 1.0286 (Market-like)

  • The levered equity beta of 1.3500 includes both operating risk and the amplifying effect of financial leverage (D/E = 0.4167).
  • Stripping out leverage reveals an asset beta of 1.0286, which represents only the firm's underlying business risk.
  • An asset beta of 1.0286 is classified as "Market-like": moves roughly in line with the market.

Next stepUse this unlevered beta as an input to WACC by re-levering it to your target capital structure, or use it directly in an asset-level CAPM calculation.

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