In short
A beta factor measures how strongly a company's equity returns move with the market. In a business valuation under IDW S 1, or an impairment test under IAS 36, the beta feeds the cost of equity, so small setting choices change the result. The smartZebra guide covers the five decisions behind a defensible beta.
What you'll learn
01 · Why a peer group beats industry betas
Industry betas give rough data. IDW S 1 and IAS 36 point to a peer group tailored to the valuation object.
02 · How to choose comparable companies
Horizontal, vertical and cross-industry search, checked against sales growth, EBITDA margin and return on assets.
03 · Raw-beta settings that move the number
Valuation date, return period and frequency, and the choice of stock index.
04 · Total beta and adjusted beta
What each variant adds, when it is used, and why experts treat total beta with caution.
05 · Is this beta reliable?
Coefficient of determination (R²), t-test, bid-ask spread, trading volume and trading days.
06 · Gearing and unlevered beta
Consistent debt ratios including leases and pensions, the tax shield and debt beta.
Used by valuation professionals
“We have already used smartZebra several times to determine beta factors. This allows us to work much more efficiently than before.” — Andrew Grums, Partner & Auditor/Tax Advisor, DELFS
“The selection of the peer group, which is usually time-consuming, works very quickly and reliably.” — Achim Dörner, Managing Partner, DWT.
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