Share buy-back and Ungeared beta: Difference between pages

Revision as of 13:08, 2 July 2022

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.

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-The process of a company buying back its own shares.  This reduces the number of shares in existence and, potentially, increases unit share price.
+The observed beta value for a company incorporates financial and business risk.
-National regulations determine how the shares bought in this way must be treated.
+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 process is widely used to adjust capital structure by reducing the proportion of equity.
+It is therefore indicative of the business risk of the company.
+The ungeared beta is also called the ''asset beta.''
 == See also ==
-* [[Buy-in]]
+* [[Business risk]]
-* [[Equity]]
+* [[Equity beta]]
-* [[Treasury shares]]
+* [[Financial risk]]
+* [[Gearing]]
+* [[Ungeared cash flow]]
 [[Category:Corporate_finance]]