Calculate Beta for Distressed Company
RX folks... how would you answer this technical question? How would you Calculate Beta for a Distressed Company? My "trick question" radar is going off...
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Beta is calculated normally. Unlever and relever to cap structure.
Is distressed company private or public?
lets say both... how would the approach differ?
For a company whose equity is 1) about to get restructured into a zero value and 2) takes up very little space in the cap stack anyway, idk why you'd bother. Post some kind of restructuring you'd have a normal company, so do it the old fashioned way using the pf cap structure.
Happy to be wrong here as I'm new to the distressed world myself.
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