Difference between revisions of "Hamada formula"
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| − | <math> \text{Unlevered beta}</math> = <math> | + | <math> \text{Unlevered beta}</math> = <math>\frac{B^L}{1+(1-T_c)*\frac{D}{E}}</math> |
Where: | Where: | ||
Revision as of 17:12, 27 August 2020
Levered Beta is the beta that reflects a capital structure that does include debt. The Unlevered Beta is the Beta of a company without any debt. Unlevering a beta removes the financial effects from leverage.
=
Where:
- is the levered, published beta
- is the companies debt
- is the companies equity
- is the corporate tax rate.
