Raw Beta vs Adjusted Beta

Capital Asset Pricing Model
Knowledge Center

 

Next Topic

Capital Asset Pricing Model > Forum > Raw Beta vs Adjusted Beta

Raw Beta vs Adjusted Beta
Prakash Kamathia
While calculating cost of equity via CAPM method, which beta one should use. Raw beta or adjusted beta and why?
 

 
Raw Beta vs Adjusted Beta
Ramon, Consultant, Spain, Member
In my modest opinion, it is better to adjust the raw beta that arises from the division of the asset return covariance with market by the market return variance. Frequent adjustments are:
(1) towards beta=1, and
(2) to take into account the effect of the leverage of the company (relevered beta).
 

 
Raw Beta versus Adjusted Beta
andres elorza, Student (University), Colombia, Member
To access this reaction, Sign up for free
 

   

React to this discussion topic? Sign up for free

 


12manage is the leading knowledge sharing platform about management. Join now to accelerate your professional development.

    Log in


Special Interest Group Leader

Interested? Sign up for free.


Capital Asset Pricing Model
Summary
Forum
Best Practices


Capital Asset Pricing Model
Knowledge Center

 

Next Topic



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2019 12manage - The Executive Fast Track. V15.1 - Last updated: 23-10-2019. All names of their owners.