How would you get to beta in the cost of equity calculation?
- Set beta to exactly 1, since over time most companies simply converge toward the market's overall volatility
- Take comparables' betas, unlever them, take the median, then relever at the target's capital structure
- Take the median comparable beta and use it as-is, without ever relevering it to the target's capital structure
- Use the company's own revenue growth rate as its beta, since faster growth means more market sensitivity
- Use the target's own raw regression beta directly, since it already reflects that one specific company's risk
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