What is levered and unlevered beta?

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Unlevered beta compares the risk of an unlevered company to the risk of the market. The
unlevered beta is the beta of a company without any debt. Unlevering a beta removes the
financial effects from leverage. This number provides a measure of how much systematic
risk a firm’s equity has when compared to the market. Unlevering is also done to compare
companies which are in competition so we can use peer method to calculate WACC.