Levered beta
A company's beta as it stands, debt included. The more debt, the more strongly the shareholder's profit reacts to a move in the market.
Formula
The debt-to-equity ratio is taken at market values and t is the tax rate as a fraction of one. The formula converts unlevered beta into levered beta.
How to read the number
This is what goes into the pricing model when the cost of equity of a specific company is being calculated.
When the metric lies
Also known as: equity beta