Unlevered beta calculator6/14/2023 Beta, therefore, first needs to be unlevered to get to Asset Beta. Within this context, the current capital structure is not relevant to the buyer. Why do we need to relever Beta?įrom a valuation perspective in a buyout opportunity there is quite often a dramatic change in capital structure, specially within Leveraged and Management Buy outs (MBOs and LBOs). This post will look at relevering Beta in WACC (weight average cost of capital). To measure performance without the impact of capital structure, we need unlevered Beta or Asset Betas. When evaluating a business, it is important to assess underlying performance with as well as without the impact of leverage. We quite often use leverage to improve returns.
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