pacmandefense

This might be the worst way to look at it but its how I remember it. Take beta of equity and unlever it by "discounting" the leverage from the Beta. In this case leverage is measured by D/E * 1- t. Equity beta / 1 + [D/E * (1- t)], somewhat like the structure of a PV formula. Then after finding the unlevered 'asset' beta, you find the project beta by reapplying the leverage somewhat similar to the FV formula of x * (1+r). In this case x = Beta of asset and r = (1-t)D/e

That's just how I remember it at least, with all this material you got to do whatever it takes.