Enter the total unlevered beta, tax rate, debt, and equity into the calculator. The calculator will evaluate and display the levered beta.
Levered Beta Formula
The following equation is used to calculate a levered beta.
Levered Beta = Unlevered Beta * [1 + (1 – T) * (D / E)]
- Where T is the tax rate (%)
- D is the total debt
- E is the total equity
Levered Beta Definition
Levered beta is a measure of a risk of a companies stock when analyzing the rate of return of a stock using CAPM. It takes into account the companies debt to equity ratio in order to come up with a risk factor that can be used as an investing metric.