Bottom-Up Beta

A beta built from a peer set rather than a regression: unlever each listed comparable at its own capital structure and tax rate, take the median, then relever at your target structure. More precise than any single regression because averaging collapses the standard error, and it is the only route available for a private company, a pre-IPO business or a new division with no share price to regress. Work through it interactively in the Beta Refresher lab at /labs/beta.

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