asset beta or unlevered beta as i understand is the beta of the company with no debt.
beat asset = beta equity / [1+d/e(1-t)]
so why the asset beta is said to be weighted average of equity and debt beta then. it is not merely equity beta??
i am missing a link in understanding the asset and equity beta concept . can someone explain the concept to me please.
thanks作者: bodhisattva 时间: 2011-7-11 15:28
anybody can explain the betas?作者: Darien 时间: 2011-7-11 15:28
I dont think it is the weighted average of equity and debt betas unless you assume that the tax rate is zero. And, obviously, the equity beta is going to be higher than the asset beta if you have debt in the capital structure.
