basic

Hamada Equation Unlevered Beta Calculator

β_U = β_L / (1 + (1 − τ) · D/E) — strip leverage from beta.

Use the Hamada equation to convert a firm's observed (levered) equity beta to its unlevered (asset) beta — useful for the pure-play comparable method of estimating discount rates: β_U = β_L / [1 + (1 − τ) · (D/E)]. Reverse the equation to re-lever β_U at a target capital structure.

Nadia Almasri By Nadia Almasri
Published Last reviewed 1 min read

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Results

Enter values and click Calculate to see results.
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How to use this calculator

  1. Fill in the inputs above using the units you already have.
  2. Values update automatically as you type — no submit button needed.
  3. Hover any result row for the underlying formula and intermediate values.

Formula

β_U = β_L / [1 + (1 − τ)·(D/E)].

In depth

Use the Hamada equation to convert a firm's observed (levered) equity beta to its unlevered (asset) beta — useful for the pure-play comparable method of estimating discount rates: β_U = β_L / [1 + (1 − τ) · (D/E)]. Reverse the equation to re-lever β_U at a target capital structure.