The climb to the beta factor

Six camps from valuation date to relevered beta: see how Valuation Pro builds the peer group, runs the regression, unlevers, takes the median and relevers to your target capital structure, with every step in the calculation log.

Valuation date and settings: set the date, return period, frequency and benchmark index.
Peer group: pick comparable companies and run them through quality gates.
Raw beta: regress each peer's returns against the index (levered beta).
Unlever: remove each peer's financing risk with βu = βl / (1 + (1 − s) · D/E).
Median: take the median unlevered beta of the peer group.
Relever: apply the target capital structure with βl = βu · (1 + (1 − s) · D/E target), ready for the cost of equity.

Questions & Answers

What does this infographic show?

The six steps from valuation date to relevered beta, as you run them in Valuation Pro, with example data.

Why unlever and relever the beta?

Each peer carries its own debt level. Unlevering removes that financing risk so peers become comparable; relevering applies the capital structure of the company you value.

Why use the median of the peer group?

The median is less sensitive to single outliers than the mean, so one unusual peer does not move the result.

Are the numbers real market data?

No. The values are illustrative example data that show the workflow, not a valuation.

Can I trace every number in Valuation Pro?

Yes. Every step is documented in the calculation log, down to the raw data.

Can I download the infographic?

Yes. Click "Download the infographic" at the top of this page.

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The climb to the beta factor

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