Unlevered Beta Calculator

Written by Great Medico

Updated September 25, 2026 •2 min read

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With Unlevered Beta Calculator, the useful part is not just the headline result but the relationship between the displayed inputs. It turns those values into one focused figure whose arithmetic can be checked.

What this calculator does

Unlevered Beta Calculator removes the modeled effect of financial leverage from an entered equity beta. It works from levered beta, debt, equity, and tax rate. For Unlevered Beta Calculator, everything in the result comes from those form values, so you can trace a change in output back to a specific input.

How to use it

Enter Levered beta, Debt, Equity, and Tax rate. For Unlevered Beta Calculator, enter percentage or rate fields on the scale displayed by the form rather than converting them to an unstated format. Before calculating, recheck Levered beta, Debt, Equity against the source numbers you intend to analyze.

How the calculation works

Unlevered beta = levered beta ÷ [1 + (1 − tax rate) × debt ÷ equity]. In Unlevered Beta Calculator, the calculator applies this relationship to the relevant values used by the stated formula. For Unlevered Beta Calculator, if the output looks unexpected, recheck the displayed inputs before interpreting the number.

Example

A levered beta of 1.4, debt of $40 million, equity of $60 million, and 25% tax rate gives an unlevered beta of about 0.933. To test sensitivity in Unlevered Beta Calculator, change one displayed input at a time and recalculate.

How to interpret the result

Unlevered beta is intended to isolate business or asset risk from the financing mix, making it useful when comparing firms with different leverage. When comparing Unlevered Beta Calculator results, change assumptions deliberately so you can see which displayed input caused the difference.

Limitations and notes

The formula assumes the entered debt, equity, tax rate, and levered beta are measured consistently. It does not adjust for cash, preferred stock, debt beta, operating leases, changing capital structure, or estimation error in beta. The Unlevered Beta Calculator output should be revisited when the assumptions behind its displayed inputs are no longer representative.