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Unlevered Beta to Levered Beta

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    • Avatar of rsparksrsparks
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        • CFA Level 2
        15 Mar 2018 at 3:28 am
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        You nearly have it.

        you need to find the asset beta.

        when d/d+e = .4

        for every dollar .4 = d, which means .6 = e

        Asset B= .9 [1+ (1-.36)(.4/.6)] = 1.28

        i believe you were taking .4/1.4 instead of .4/.6

        hope this helps,

        Ron

      • Avatar of AasimAasim
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          • CFA Level 1
          15 Mar 2018 at 9:16 am
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          Thank you very much rSparks!

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