Levered Beta Calculator

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.

Levered Beta Example

How to calculate levered beta?

  1. First, determine the tax rate.

    Determine the effective tax percentage.

  2. Next, determine the total debt.

    Calculate the total debt.

  3. Next, determine the total equity.

    Calculate the total equity.

  4. Finally, calculate the levered beta.

    Calculate the levered beta using the formula above.

FAQ

What is levered beta?

Levered beta is a measure of risk of a stock or business based on their tax rate, total debt, and total equity.

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