Finance

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Unlevered Beta Calculator.

Calculate unlevered beta with the Hamada formula.

On-device calculationNo signup

Set your values

Results update as you type.

02 / ANSWER

Levered beta

Debt-to-equity ratio

Tax rate

Unlevered beta

0.0000

FAQs

How does the unlevered beta calculator work?

Enter the requested values to receive a deterministic result. No live market, tax, or jurisdiction data is inferred.

Use Cases

Compare companies with different capital structures

Unlevered beta allows you to compare the business risk of companies that have different levels of debt. By removing leverage, you can see which company has higher operational risk.

Example: Compare a levered beta of 1.2 with D/E of 0.5 and tax rate 25% to another with D/E of 1.0.

Calculate cost of equity for a private company

When valuing a private company, you can use the unlevered beta of comparable public companies, then relever it to match the private company's target capital structure.

Example: Use unlevered beta of 0.8 and relever with D/E of 0.3 and tax rate 30%.

Frequently Asked Questions

What is unlevered beta?: Unlevered beta (or asset beta) measures the systematic risk of a company's assets without the impact of debt. It is calculated by removing the financial leverage effect from the levered beta, using the formula: Unlevered Beta = Levered Beta / (1 + (1 - Tax Rate) * Debt-to-Equity).
Why is unlevered beta important?: Unlevered beta is used to compare the business risk of companies with different capital structures. It isolates the risk inherent to the industry or operations, making it useful for valuation, cost of capital calculations, and peer comparisons.
How does tax rate affect unlevered beta?: The tax rate adjusts the debt-to-equity ratio because interest payments are tax-deductible. A higher tax rate reduces the effective cost of debt, thus lowering the unlevered beta. The formula uses (1 - Tax Rate) to account for this tax shield.

Tips & Common Mistakes

Tips

Ensure the levered beta you input is from a reliable source and matches the company's current capital structure.
Use the marginal tax rate that reflects the company's future tax obligations, not necessarily the historical effective tax rate.
Debt-to-equity ratio should be based on market values, not book values, for accuracy.
If the company has preferred stock, consider adjusting the formula to include it as part of the debt-equity mix.

Common Mistakes to Avoid

Using the effective tax rate instead of the marginal tax rate, which can distort the unlevered beta.
Forgetting to convert the debt-to-equity ratio to a decimal (e.g., 0.5 instead of 50%).
Using book value of debt and equity instead of market values, leading to an inaccurate unlevered beta.

Last updated: August 13, 2026

Use Cases

Compare companies with different capital structures

Unlevered beta allows you to compare the business risk of companies that have different levels of debt. By removing leverage, you can see which company has higher operational risk.

Example: Compare a levered beta of 1.2 with D/E of 0.5 and tax rate 25% to another with D/E of 1.0.

Calculate cost of equity for a private company

When valuing a private company, you can use the unlevered beta of comparable public companies, then relever it to match the private company's target capital structure.

Example: Use unlevered beta of 0.8 and relever with D/E of 0.3 and tax rate 30%.

Frequently Asked Questions

What is unlevered beta?

Unlevered beta (or asset beta) measures the systematic risk of a company's assets without the impact of debt. It is calculated by removing the financial leverage effect from the levered beta, using the formula: Unlevered Beta = Levered Beta / (1 + (1 - Tax Rate) * Debt-to-Equity).

Why is unlevered beta important?

Unlevered beta is used to compare the business risk of companies with different capital structures. It isolates the risk inherent to the industry or operations, making it useful for valuation, cost of capital calculations, and peer comparisons.

How does tax rate affect unlevered beta?

The tax rate adjusts the debt-to-equity ratio because interest payments are tax-deductible. A higher tax rate reduces the effective cost of debt, thus lowering the unlevered beta. The formula uses (1 - Tax Rate) to account for this tax shield.

Tips & Common Mistakes

Tips

Ensure the levered beta you input is from a reliable source and matches the company's current capital structure.
Use the marginal tax rate that reflects the company's future tax obligations, not necessarily the historical effective tax rate.
Debt-to-equity ratio should be based on market values, not book values, for accuracy.
If the company has preferred stock, consider adjusting the formula to include it as part of the debt-equity mix.

Common Mistakes to Avoid

Using the effective tax rate instead of the marginal tax rate, which can distort the unlevered beta.
Forgetting to convert the debt-to-equity ratio to a decimal (e.g., 0.5 instead of 50%).
Using book value of debt and equity instead of market values, leading to an inaccurate unlevered beta.

Finance

Instant, private, and free

Unlevered Beta Calculator.

Calculate unlevered beta with the Hamada formula.

On-device calculationNo signup

Set your values

Results update as you type.

02 / ANSWER

Levered beta

Debt-to-equity ratio

Tax rate

Unlevered beta

0.0000

FAQs

How does the unlevered beta calculator work?

Enter the requested values to receive a deterministic result. No live market, tax, or jurisdiction data is inferred.

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Use Cases

Compare companies with different capital structures

Unlevered beta allows you to compare the business risk of companies that have different levels of debt. By removing leverage, you can see which company has higher operational risk.

Example: Compare a levered beta of 1.2 with D/E of 0.5 and tax rate 25% to another with D/E of 1.0.

Calculate cost of equity for a private company

When valuing a private company, you can use the unlevered beta of comparable public companies, then relever it to match the private company's target capital structure.

Example: Use unlevered beta of 0.8 and relever with D/E of 0.3 and tax rate 30%.

Frequently Asked Questions

What is unlevered beta?: Unlevered beta (or asset beta) measures the systematic risk of a company's assets without the impact of debt. It is calculated by removing the financial leverage effect from the levered beta, using the formula: Unlevered Beta = Levered Beta / (1 + (1 - Tax Rate) * Debt-to-Equity).
Why is unlevered beta important?: Unlevered beta is used to compare the business risk of companies with different capital structures. It isolates the risk inherent to the industry or operations, making it useful for valuation, cost of capital calculations, and peer comparisons.
How does tax rate affect unlevered beta?: The tax rate adjusts the debt-to-equity ratio because interest payments are tax-deductible. A higher tax rate reduces the effective cost of debt, thus lowering the unlevered beta. The formula uses (1 - Tax Rate) to account for this tax shield.

Tips & Common Mistakes

Tips

Ensure the levered beta you input is from a reliable source and matches the company's current capital structure.
Use the marginal tax rate that reflects the company's future tax obligations, not necessarily the historical effective tax rate.
Debt-to-equity ratio should be based on market values, not book values, for accuracy.
If the company has preferred stock, consider adjusting the formula to include it as part of the debt-equity mix.

Common Mistakes to Avoid

Using the effective tax rate instead of the marginal tax rate, which can distort the unlevered beta.
Forgetting to convert the debt-to-equity ratio to a decimal (e.g., 0.5 instead of 50%).
Using book value of debt and equity instead of market values, leading to an inaccurate unlevered beta.

Last updated: August 13, 2026