Asset beta: Difference between revisions
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imported>Doug Williamson (Layout.) |
imported>Doug Williamson (Mend link.) |
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The observed beta value for the securities issued by a company incorporates both financial and business risk. | The observed beta value for the securities issued by a company incorporates both financial and business risk. | ||
The asset beta is also called the ungeared beta. | The asset 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 asset beta is also called the ''ungeared beta''. | |||
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* [[Business risk]] | * [[Business risk]] | ||
* [[Financial risk]] | * [[Financial risk]] | ||
* [[Ungeared | * [[Ungeared]] | ||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
Latest revision as of 13:08, 2 July 2022
The observed beta value for the securities issued by a company incorporates both financial and business risk.
The asset 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 asset beta is also called the ungeared beta.
