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Unlevered Beta Calculator — result sheet
Remove an entered capital-structure effect from a levered beta using debt, equity, and an explicit tax-rate assumption.
Inputs used
Results
Visual chart
Breakdown
Calculation steps
Returned data table
Formula and methodology
Formula: Debt-to-equity = debt ÷ equity; leverage factor = 1 + (1 − tax rate) × debt-to-equity; unlevered beta = levered beta ÷ leverage factor.
This is the standard Hamada-style arithmetic for separating an entered equity beta from an entered financial-leverage assumption. Debt and equity values must use the same valuation basis. The tax rate is an explicit scenario input and is never inferred from the visitor’s country.
This result follows the calculator's declared inputs, precision, validation boundaries, and model limits.
Input contract
- Levered beta — beta; minimum -100; maximum 100
- Debt value — currency units; minimum 0; maximum 1000000000000
- Equity value — currency units; minimum 1.0E-6; maximum 1000000000000
- Tax rate assumption — percent; minimum 0; maximum 100
Worked example
| Input | Value |
|---|---|
| Levered beta | 1.2 |
| Debt value | 1500000 |
| Equity value | 3000000 |
| Tax rate assumption | 25 |
Debt/equity = 0.50; leverage factor = 1.375; unlevered beta ≈ 0.872727.
Assumptions and limits
- Debt and equity are measured on the same market or book-value basis selected by the visitor.
- The debt beta is treated as zero in this simplified adjustment.
- The tax rate is a supplied marginal-rate scenario and is entered as a whole percentage.
- Equity value must be positive and the resulting leverage factor must remain positive.
- Operating leverage, cash beta, changing capital structure, distress risk, and country tax law are not modeled.
- The result is an analytical beta scenario, not a forecast of future returns or a recommendation.
Calculator note
Source and methodology
Use the official WorldCalculate methodology policy for the source, formula, precision, and boundary standards behind this calculator.
Planning estimate, not financial, medical, legal, or professional advice. © WorldCalculate — reuse with attribution. Built and curated by Hassan ALRowaie.
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