Warning: include_once(/home/coolinve/public_html/conf/db_config.php) [function.include-once]: failed to open stream: No such file or directory in /home/bgwebdiz/public_html/coolinvesting/dictionary/index.htm on line 28
Warning: include_once() [function.include]: Failed opening '/home/coolinve/public_html/conf/db_config.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/bgwebdiz/public_html/coolinvesting/dictionary/index.htm on line 28
Warning: include_once(/home/coolinve/public_html/conf/db_select.php) [function.include-once]: failed to open stream: No such file or directory in /home/bgwebdiz/public_html/coolinvesting/dictionary/index.htm on line 30
Warning: include_once() [function.include]: Failed opening '/home/coolinve/public_html/conf/db_select.php' for inclusion (include_path='.:/usr/lib/php:/usr/local/lib/php') in /home/bgwebdiz/public_html/coolinvesting/dictionary/index.htm on line 30
Unlevered Beta
Unlevered Beta is the Beta of a company that has no debt at all.
Unlevered beta compares risk of unlevered company with risk of the market and shows how much systematic risk a company has when compared to systematic risk of the market.
By comparing unlevered betas of number of companies, investor will get a clue of the amount of risk he will take if he purchases company's stock.
Unlevered beta is calculated by the following equation:
Bu = Bl / [1 + (1-Tc) * (D/E)], where:
Bl = company's beta with leverage
Tc = corporate tax rate
D/E = debt/equity ratio
| Related Terms: |