Ungeared beta: Difference between revisions
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imported>Doug Williamson m (Spacing 14/8/13) |
imported>Doug Williamson (Clarify.) |
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The beta value for a company | 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. | 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. | ||
Revision as of 10:32, 18 April 2015
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.
