Calculator · Cost of capital
Bottom-up beta calculator
Unlever and relever industry betas for a target capital structure, combine several business segments and switch to total beta for an undiversified owner, using Damodaran industry data for eight regions.
How the bottom-up beta works
A bottom-up beta replaces a noisy regression beta for one company with the average unlevered beta of its industry. The calculator takes Damodaran's unlevered beta (cash-corrected where available) for each segment, weights the segments by value or revenue, and relevers the result with the Hamada formula at your target debt-to-equity ratio and marginal tax rate.
For an owner who is not diversified, such as the owner of a private business, the total beta option divides the market beta by the correlation with the market, as Damodaran suggests. Region, data update and segment choices are recorded in the input register.
Related: Cost of equity calculator · WACC calculator · Damodaran data guide · Model notes
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