1. What is Unlevered Beta?

Unlevered Beta (also called asset beta) measures the market risk of a company without the impact of debt. It shows the volatility of returns for a business, excluding financial leverage. In forex, it helps compare risk across companies with different capital structures.

2. How Does the Calculator Work?

The calculator uses the unlevered beta formula:

Where:

• Levered Beta — The company's equity beta (reflects current capital structure)
• Tax Rate — Corporate tax rate (as percentage)
• Debt — Total debt of the company
• Equity — Total equity of the company

Explanation: The formula removes the effect of financial leverage to show the business's pure risk.

3. Importance of Unlevered Beta in Forex

Details: In forex markets, unlevered beta helps compare companies across different countries with varying capital structures and tax regimes. It's essential for international portfolio diversification and risk assessment.

4. Using the Calculator

Tips: Enter the company's levered beta, tax rate (as percentage), total debt and equity in USD. All values must be positive (except debt can be zero).

5. Frequently Asked Questions (FAQ)

Q1: Why calculate unlevered beta for forex analysis?
A: It allows comparison of companies across different countries with varying capital structures and tax laws.

Q2: What's a typical unlevered beta range?
A: Most companies have unlevered betas between 0.5-1.5. Below 1 indicates less volatility than the market.

Q3: How does forex risk affect beta?
A: Currency fluctuations add another layer of volatility that may need separate analysis beyond unlevered beta.

Q4: Can unlevered beta be negative?
A: Extremely rare, but possible for businesses with returns negatively correlated to the market.

Q5: How often should I recalculate unlevered beta?
A: Quarterly or whenever there's significant change in capital structure or market conditions.