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Dear Bankers,

Following are the formulas -

Unlevered Beta = Levered Beta / (1 + ((1 – Tax Rate) x (Debt/EQUITY)))

Levered Beta = Unlevered Beta x (1 + ((1 – Tax Rate) x (Debt/EQUITY)))

My question -

In the Debt/EQUITY part the EQUITY is Book Value of Equity or the Market Value or Enterprise Value ?

Comments (3)

  • CubicleCrowd's picture

    yep market value

    cubiclecrowd.com
    blog.cubiclecrowd.com

  • ibhopeful532's picture

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