Ungeared beta: Difference between revisions
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The ungeared beta is calculated from the observed beta; to reflect the beta value which would be observed if the company were all equity financed. | The ungeared beta is calculated from the observed beta; to reflect the beta value which would be observed if the company were all equity financed. | ||
It is therefore indicative of the business risk of the company. | It is therefore indicative of the business risk of the company. | ||
Revision as of 19:42, 21 January 2018
The observed beta value for a company incorporates financial and business risk.
The ungeared beta is calculated from the observed beta; to reflect the beta value which would be observed if the company were all equity financed.
It is therefore indicative of the business risk of the company.
The ungeared beta is also called the asset beta.
