Equity beta: Difference between revisions
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In the Capital asset pricing model (CAPM), the relevant measure of total equity risk. | In the Capital asset pricing model (CAPM), the equity beta is the relevant measure of total equity risk. | ||
This total risk results from both: | |||
:(i) the underlying business risk and | |||
:(ii) the additional financial risk resulting from the level of debt in the firm’s financial structure (financial gearing). | |||
The equity beta is also known as Geared beta or Levered beta. | |||
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* [[Beta]] | * [[Beta]] | ||
* [[Capital asset pricing model]] | * [[Capital asset pricing model]] | ||
* [[Equity]] | |||
* [[Equity risk]] | * [[Equity risk]] | ||
* [[Gearing]] | |||
* [[Ungeared beta]] | * [[Ungeared beta]] | ||
[[Category:The_business_context]] | |||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
[[Category:Identify_and_assess_risks]] | |||
Latest revision as of 15:24, 9 February 2019
In the Capital asset pricing model (CAPM), the equity beta is the relevant measure of total equity risk.
This total risk results from both:
- (i) the underlying business risk and
- (ii) the additional financial risk resulting from the level of debt in the firm’s financial structure (financial gearing).
The equity beta is also known as Geared beta or Levered beta.
